Reparations are Owed to Africa
By: Noel Gordon Jr
Tags: Cocoa, Economics, Africa, Racism, Ghana

I used to believe that ‘globalization’ was a force for good in the world, however, after thinking through the long-term effects of COVID-19 on the global economy, my perspective has shifted in favor of ‘deglobalization’. It once seemed obvious to me that the free flow of goods, people, and services would result in greater wealth for us all, but it is now far more tempting to ask: Greater wealth for whom? Globalization requires a perpetually cheap supply of labor to keep prices low and profits high. But the workers responsible for generating this wealth are too often left out of the equation, particularly those living in middle-to-low income countries like Ghana.

Globalization has enabled Ghana to become the largest producer of cocoa anywhere in the world. The cocoa industry employs 800,000 farmers in Ghana and it supports the livelihood of millions more working in various other parts of the economy. But most Ghanaian farmers earn less than $1.00 each day. That’s because most of the economic surplus generated by the global trade of cocoa is captured and consolidated in the hands of a few multinational corporations headquartered outside of Ghana. Ghanaian farmers could raise their prices in hopes of keeping a greater share of the wealth created by cocoa each year (currently valued at $24.5B), but it’s not clear whether the Ghanaian government would allow that to happen since a notable change in price might result in fewer sales contracts for their corporate partners. It is the global market that creates the need for price controls and a minimum wage in Ghana, not the government. This cruel fact of life seems to me like strong evidence of an uneven distribution of wealth, income and personal assets in Ghana, much like the United States.

Critics of ‘deglobalization’ contend that a macroeconomic shift toward local or regional economies in Africa would portend a sharp fall in both corporate profits and stock, as well as, reverse decades of economic growth in countries just like Ghana. I don’t yet know enough about the economics of international development to say whether such claims are true, but the latter consequence seems far worse to me than the former given the record-breaking profits posted by Amazon and other large multinational corporations this year. Learning more about the Ghanaian economy has helped me realize the importance of studying topics in international business. Because of globalization, whatever happens to cocoa farmers in Ghana, is likely to have some degree of effect on chocolate consumers here in the US.

I am willing to pay $0.30 cents more for a Hershey’s chocolate bar if it means better living conditions for the Ghanaian farmer who harvested it. But narrowly defining the issue in that way is to miss the forest for the trees. I am far more concerned with the growing consolidation of Ghana’s wealth in the hands of a few elite white business owners, a situation only made plausible by the Trans-Atlantic Slave Trade and the Rape of Africa just a few generations ago. Having learned more about the plight of Ghanaian cocoa farmers this year, it’s not clear to me why the workers in any country should bear the costs of COVID-19, a global health crisis fueled by bad government policy, irresponsible politicians and corporate greed, especially when the average cocoa farmer in Ghana lives in extreme poverty through no fault of their own.

If you believe, as I do, that the purpose of economic development is to increase everyone’s quality of life on Earth, then there is a strong argument to be made that what is owed to Africans anywhere and everywhere in the world is reparations. Whether in the form of direct cash payments or immediate debt cancellation, I’ve long thought that an intentional redistribution of the wealth created by globalization could remedy its most harmful effects, like intergenerational poverty and climate change. But now I know it could also bring about a virtuous business cycle that ensures long-term peace and economic prosperity for us all. The COVID-19 crisis has only solidified my belief in the cause of reparations for people of African descent.