There was a shocker from President Akuffo Addo as he became the first Ghanaian president in over sixty years to make an official visit to Switzerland. The President boldly declared Ghana will no longer export raw cocoa beans to his hosts. For a country that has been an official partner in the cocoa trade for almost half a century. One that imports more than 90% of its cocoa from Ghana, this is certainly telling. For us though, we had expected this for a long while now. Just last year, big U.S. chocolate producing companies like Hersey refused to pay a special levy for Ghanaian and Ivorian cocoa farmers. The two biggest cocoa growers- Ghana and sister country Ivory Coast responded by suspending exports to them.
President Akuffo Addo’s declaration is a revelation of the plan of Ghana and the Ivory Coast to add value to their cocoa. What this implies is industries will be set up to turn raw beans into semi-processed or finished products of a higher value. It also infers that the government will put measures in place to encourage investment. There couldn’t have been a better time to build a brand in this industry. This article provides a guide on key points for potential investors.
Finances
As a foreign investor, it is important to have your finances in place before making your moves. A budget of Ghs 500,000 should be enough to get you going. Having at least a quarter of that sum will be advantageous to your plans. It will readily help you make headway via the “Private Public Partnership” scheme being promoted by this government. You can also be availed a loan of up to Ghs1, 000,000 from the Government-owned Venture Capital Trust fund. Investment and agricultural-centered banks like the National Investment Bank and the Agricultural Development bank are also good sources of credit. They offer low-interest loans to investors- especially those in the agricultural sector.
Land
As a foreigner, you can’t own land in Ghana. You can lease for a maximum of 99 years. Worry not, if you want one with eternal ownership, there are so many ways to avert this. You may partner with a Ghanaian citizen. You can also decide to go for a Private Public Partnership scheme with the government. There is a project currently going on called “one district, one factory”. Under this scheme, the government can aid you to acquire land for little to nothing as long as you prove your commitment. In urban areas, land is naturally very expensive. It is practical to get plots in rural localities close to farming areas. All you have to do is to make sure the right arrangements are in place for the transportation of products to urban areas.
The Market
There has always been an endless need for chocolate and chocolate related products. The value chain for this industry is literally infinite. From cosmetics to home care, to cleaning and down to food industry. If your target is local, you are looking a billion cedi market. If your target is international (which it should be,) then you have a billion dollar market. Ghana cocoa is esteemed worldwide as being of the highest quality. In certain nations like India and Germany, chocolate or products made from Ghana cocoa, are sold more expensively. The fact that the Ghanaian Government is seeking to make high-value products nationally gives you the opportunity to compete and win on the international level.
Skilled Manpower
The Food technology industry has been a mainstay in Ghana for decades. The processing of raw cocoa to finished products has also been part of our industrial drive. This has been at a low scale though; with the government-owned Cocoa Processing Company largely holding a monopoly with its Golden Tree brand. Over the past decade, entrepreneurs have delved into have their slice of the sector. Some chocolatiers are even rendering training services to willing students. Obtaining the requisite skilled labor for your business will not be a problem.
Source of Supply
There are a variety of options available to you with regards to getting a steady supply of cocoa beans. You can decide to purchase from merchants at standard cocoa prices. Better still, you can strike a partnership with local farmers and offer to buy directly from them. You may decide to save them the cost of transportation and extra labor by offering to buy the harvested pods from them. This way they would be willing to offer you cheaper prices knowing that it is a win-win situation for both parties. Getting your beans from a specific source would also assure you of consistent quality.
Packaging
It is not just enough to churn out products of high quality. One must have the right packaging system in place. This is not just to enhance aesthetic appeal. It is also essential especially when there is a high likelihood these products will be exported. You would want your product to arrive on foreign shelves looking presentable and being of apt quality.
There are a couple of high-quality packaging firms in the country. All of which are producing presentable and durable packaging mediums. You can be rest assured of packaging material of the highest quality. Also if you choose to import, there is a high probability of getting the requisite Governmental support.
Paperwork
As a foreigner there are quite a handful of documents you would need to operate a business in Ghana. This is even more relevant for a critical economic sector such as cocoa farming. Firstly, if you would be staying in Ghana, you would need the requisite immigration documents to be able to operate a business. Then you would need to register your business. Getting a Ghanaian partner is the best way to facilitate things. You would also need the right certifications from Ghana COCOBOD, the Ghana F.D.A., and the Ghana E.P.A. Actually, the first agency is the right body to contact for guidance as a potential investor.
Other logistics
Setting up a local processing plant shouldn’t be an issue. There are excellent fabricators and manufacturers who can locally produce durable machines for you. Value addition is a venture the Government will take a key interest in. This translates into the facilitation of business transactions and the waiving of fees. If you thus prefer to import machinery for your business into the country. You can be rest assured that duties will be waived or lowered. You might even get them on a hire-purchase deal with either the government or government operated business institutions.