ACCRA, Sept 8 (Reuters) – Ghana may lose more than $80 million in foreign exchange this year as a result of the low price of cocoa on world markets, Finance Minister Kwame Peprah said on Wednesday.
He said the state budget would suffer a revenue loss of about 138 billion cedis ($52 million) this year and about 200 billion cedis in 2000 if cocoa prices did not recover.
Its 1999 budget was based on planned revenue including grants of 4,112 billion cedis.
“The (price) decline was further being undermined by poor consumption of cocoa by major consumers and good weather conditions in Ivory Coast, Ghana and Indonesia, the world’s top three producers,” the official Ghana News Agency quoted him as saying in an interview.
Peprah declined to say whether this budgetary situation would lead to cuts in expenditure or increases in taxation — both of them difficult options in 2000, an election year.
He also refused to say whether the government was considering following the Ivorian example of reducing the producer price if world prices did not recover.
“The desire by the European Union to implement its proposal to (allow) 5 percent vegetable fat in the manufacture of chocolate had jeopardised any hope for the recovery of demand for cocoa beans, making them (prices) unpredictable,” he was reported as saying.
However, he added that “the low consumption pattern by major consuming countries gives a faint hope for price recovery.”
Ghana has projected that it will produce between 400,000 and 450,000 tonnes of cocoa in 1999/2000 (Oct/Sept), compared to an estimated 415,000 for 1998/99.
Cocoa vies with gold as Ghana’s biggest foreign exchange earner and the prices of both are currently weak.
($ – 2,630)
