Digital payments for Ghana’s cocoa growing communities could prove vital to the sector

While much of Europe begins to wind down manufacturing operations for what remains of the summer amid the ongoing pandemic, there are still plenty of key news stories bubbling away that are well worthy of deeper focus.

Undoubtedly one of the most significant matters to emerge for the sector is a report authored by the World Cocoa Foundation (WCF) and the UN-based Better Than Cash Alliance, focusing on the need to drive digital payments for farmers operating in the significant market of Ghana.

The country remains second only to Ivory Coast in terms of volumes of cocoa produced which is subsequently destined for the global chocolate confectionery market, which underscores just why it has been a core area of attention for major confectionery businesses in terms of sustainability activities.

The latest WCF-backed report has highlighted a core issue of only 10% of payments being made digitally for farmers in Ghana’s cocoa sector – despite the fact that 90% of farmers now own mobile phones according to latest research.

As the report notes, cracking the issue of enabling far more digital payments to farming communities and educating those at the sharp end of the industry on this is absolutely vital in terms of helping raise their standards of living.  Presently, as in the Ivory Coast, many farmers are sadly forced to work for payments well below UN definitions of poverty, which can only be addressed through ensuring basic levels of pay are raised wholesale.

With cocoa prices having taken a notable hit amid the coronavirus pandemic within West Africa, this is a critical issue that needs to be adopted at government level to provide rapid solutions on the ground. As Confectionery Production has previously noted – unless direct action is taken to radically raise the conditions that many in the sector are facing, then the sustainability of the industry is very much called into question as farmers struggle to earn subsistence wages.

Another major issue that the report, titled, Digitising Payment in Ghana’s Supply Chain notes, (see the full story within our newsletter this week), rightly makes, is the belief in the core benefits are clearly there in that it delivers a safe method of renumeration that offers a level of transparency cash payments simply cannot provide. But crucial this, notes the study, will be further work required to enable farmers access to digital markets for other supplies and goods that provide them with an adequate incentive for making the transition to considering going online.

Clearly, for many rural farming communities in Ghana that form the backbone of the cocoa sector, digital and financial literacy may not be especially high – but as the WCF notes, with a sustained programme of education, real progress can be made that does not in fact require high levels of technological investment. Simple, effective payment systems based upon the already high use of mobile phones, may well have a transformative effect if enough communities can be convinced of the positives of making such a move. As the world moves forward with an ever growing focus on digital systems, it’s clear there is huge potential in applying such solutions to helping raise the living standards of those who really need assistance most.

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