Key sector report highlights value of digital payments to Ghana’s farmers

The World Cocoa Foundation (WCF) has released a report with the UN-based Better Than Cash Alliance of governments and companies, aiming to bring about major payment efficiencies for farmers in Ghana through introducing digital transactions. Neill Barston reports.

Its central goal has been to identify means of improving financial security for agricultural workers, many of whom are operating on below defined global poverty levels against a decline in profitability within the sector.

As a recent linked WCF study, the Cost of Cash, found, a total of 90% of payments to farmers ($1.26 billion) are currently done in cash, which the organisation has highlighted raises issues of personal safety, higher costs and lower productivity and transparency levels – which are all crucial factors within sustainability efforts within the region.

With research showing that 91% of Ghana’s population own mobile phones, linked to 32 mobile money accounts, the basis for technology to introduce more secure digital payments is firmly in place.

There are presently around 800,000 farmers within the cocoa value chain in Ghana, with 25% of them being women. The WCF’s studies showed that there were at least four million people to some degree relying on the cocoa sector serving the global confectionery market.

As the WCF noted, by adopting digital payments direct from licensed buying companies (LBCs) to farmers, firms can shorten their operational cycles, reduce their interestcost and achieve a higher return on their capital. The safety of staff and purchasing clerks (PCs) will be greatly improved, and farmers will be able to access relevant financial services and credit needed to invest in their farms.

Writing in his forward to the report, Rick Scobey, president of the WCF, believed there had been tangible progress made with its initiative. He said: “In 2018, when the World Cocoa Foundation (WCF) and the Better Than Cash Alliance launched a partnership aimed at supporting our member companies to transition from cash to digital payments, we could not have imagined how far we would come. Since then, six of the largest License Buying Companies in Ghana are experimenting with digital payment methods to Purchasing Clerks or directly to farmers.

“Our engagement has helped some of our members to start their first digitisation initiatives. These efforts have led to around 700 digital transactions with a value of $1.2 million, with close to 2,000 farmers receiving some form of digital financial literacy training. These experiences and the engagement of all players have resulted in a wealth of lessons that are now presented in this report.”

Based on these experience of its studies, the WCF’s latest report delivered four key building blocks along with practical tools designed to help companies put in place scalable and responsible digitisation measures in the cocoa sector.

These included building farmers’ familiarisation with digital payment systems to arrive at a model that works well for them, as well as creating a clear understanding across the entire value chain of the benefits of digitisation in order to increase the level of acceptance of digital transactions from its present low base of 10%. Thirdly, the WCF noted that simply digitising payments alone would not be sufficient for it to be successful – this would have to be in combination with farmers having the ability to buy a broader range of goods and services on a digital basis.

The final measure relates to the first step in tackling and offering community support on the wider issue of a perceived comparatively low level of financial and digital literacy within outlying rural areas of Ghana – where many of the cocoa farming sites are based.


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