ACCRA, March 23 (Reuters) - Ghana's economy has started to feel the pinch from its falling cocoa production, central bank data showed, with low exports reducing the trade surplus by more than half for the first two months of the year, threatening the cedi currency.
The world's number two cocoa-producing country expects output to be almost 40% below target in the 2023/24 season due to a combination of strong winds, scant rain, smuggling and disease.
Growth in the cocoa sub-sector contracted 1.1% in the last quarter of 2023, according to the national statistical body.
A summary of economic and financial data released by the Bank of Ghana on Friday showed that cocoa export receipts fell by almost a third to $508.4 billon in February.
The West African nation's trade surplus then fell by 54.5%, from $862.5 million to $392.8 million between February 2023 and February 2024.
The cedi currency has lost more than 8% against the dollar since the start of the year. Ghana's cocoa marketing board did not respond to a request for comment.
The central bank data showed that the nation's primary balance ended 2023 at a surplus 0.4%.
Since cocoa production peaked in 2020/21 season, output has been declining and now estimated to fall to 580,000 tons this season, according to the cocoa marketing board.
In 2022/23 season, the board said about 150,000 tons of cocoa was lost to smuggling and illegal gold mining known locally as galamsey. It expects even greater losses this season as rising global cocoa prices incentivise smuggling.
The regulator said cocoa swollen shoot virus, which causes yields to drop and kills cocoa trees, had wiped off about 500,000 hectares of farmlands.
The challenges in the cocoa sector come as Ghana charts its way out of its worst economic crisis in a generation.
After defaulting on much of its overseas debt in 2022, the government last year secured a $3 billion loan programme with the International Monetary Fund, and in January reached a deal to restructure $5.4 billion of loans with its official creditors.
It is now pushing for a deal with holders of about $13 billion in international bonds. (Reporting and writing by Maxwell Akalaare Adombila; Editing by Portia Crowe and Christina Fincher)
