A mounting crisis in Ghana’s cocoa sector, triggered by a producer price reduction at the start of the 2025/2026 crop season, has reignited a debate that goes deeper than farmgate prices. It has brought Ghana’s three-decade-old free zone framework directly into the line of fire, raising a question that policymakers have long avoided: is an export incentive regime designed in 1995 still fit to serve the structural needs of Ghana’s most strategic agricultural commodity in 2026?
The challenge was given a sharper edge by Nana Aduna II, spokesperson for the Ghana National Cocoa Farmers Association (GNACOFA) and chief executive of OheneCocoa Ltd, who described the free zone concept as “completely anti-competitive” and argued that the current architecture damages domestic industry far more than it develops it. He also took direct aim at the processing question, pointing out that despite official claims about local cocoa processing reaching 50%, very little of that processing is genuinely controlled by Ghanaian-owned companies, with the sector remaining heavily dependent on foreign interests.
His critique lands at a particularly sensitive moment. The 2025/2026 cocoa season opened with a producer price of GH¢51,660 per tonne, calculated at 70% of the Gross Free on Board (FOB) price of US$7,200 per tonne at an exchange rate of GH¢10.25 to the US dollar. International cocoa prices have since collapsed to around US$3,500 to US$3,600 per tonne, meaning farmers who were earning the equivalent of GH¢3,625 per bag are now losing roughly GH¢1,000 on the same bag, an adjustment that for smallholder farmers is not marginal but existential, cutting into school fees, fertiliser, food and survival.
At the centre of the policy debate is the Free Zones Act, 1995 (Act 504), which grants licensed enterprises operating in export-oriented zones or under single-factory status a ten-year corporate income tax holiday, followed by a reduced corporate tax rate of 15%, full exemption from import duties, shareholder dividend withholding tax exemptions, unconditional repatriation rights for profits in convertible currency, and access to international arbitration in disputes with government. The Ghana Free Zones Authority (GFZA) supervised these arrangements.
In 2025, cocoa processing companies operating under the free zone scheme generated cumulative export earnings of approximately US$1.8 billion and provided direct employment to nearly 1,900 Ghanaians, with thousands of additional indirect jobs across logistics, packaging, and farming communities. The GFZA has cited those numbers as evidence that the framework is working as intended. Farmer representatives argue the numbers prove the opposite: that the scale of foreign exchange generated at the processing stage is not translating into fair returns for the farmers who produce the raw material underpinning it all.
Nana Aduna II questioned why cost-cutting measures across the cocoa value chain, from the haulage system and licensed buying companies through to the Ghana Cocoa Board (COCOBOD) itself, landed exclusively on farmers. “The first step should have been to reduce the salaries of staff and the margins that the government makes by the same amount,” he argued. “If COCOBOD staff were also affected, it would create a fairer system and a level playing field for farmers.”
The broader call from GNACOFA is for cocoa to be treated as a business subject to transparent commercial logic rather than as a political instrument. “Cocoa is a business. As long as we continue politicising our cocoa, we will have this challenge,” Nana Aduna II said.
One reform gaining ground is a legislative guarantee fixing farmers’ farmgate price at a defined percentage of the international FOB price, which would create predictability regardless of global market swings. Analysts note that timely payment, even at a lower price, can significantly reduce farmer distress, and that Ghana’s communication with producers remains one of the sector’s most persistent structural weaknesses.
The government has indicated it intends to introduce a new cocoa bill that would entrench the 70% FOB price guarantee into law, and Cabinet has directed a criminal probe into COCOBOD operations covering the past eight years. Whether those reforms will extend to a structural review of the free zone regime as it applies to cocoa processing remains an open question, but one that is unlikely to stay unanswered for long.
