Investigating the challenges of cocoa purchasing process in Ghana

The study sought to “Investigating the Challenges of Cocoa Purchasing process in Ghana”. The main aim of the research was to determine the challenges of cocoa purchasing process in Ghana. Specifically the study sought to achieve the following objectives: (1) Identifying the challenges that affect cocoa purchasing process in Ghana. (2) Assessing the effects of the challenges on Licensed Buying Companies and COCOBOD. (3) Proposing a checklist for controlling the challenges faced at the various stages of cocoa purchasing process Primary data were collected using questionnaire as the main source of data for the study. Based on the heterogeneous nature of the study area a purposive random sampling method was used to select the managements and staffs for both COCOBOD and Licensed Buying Companies forming the main variables under study. The study employed descriptive data analysis method. The descriptive statistics for the analysis employed SPSS version 20 in obtaining the frequencies, percentage, the mean and the standard deviation scores. The study specifically observed that both Cocobod and Licensed Buying Companies face many major challenges which tend to affect their operations and effectiveness. The high rate of agreement to the perceived challenges outlined in the research questionnaires by both management and staff of COCOBOD and LBC attest to the validity of the perceived challenges. The average mean score for the perceived challenges responded by both LBC and Cocobod registered a high mean score averaging 1.4 with relatively lower average standard deviation score averaging 0.5. The severity of impact on Cocobod and LBCs operations and effectiveness is very high. The major challenges identified have high probability of occurrences with very high severity of negative impact on Cocobod and LBC operations. This made the conclusions for the study both valid and reliable Some major challenges identified constituting the dependent variable for the study include: high operational cost, cocoa price instability, high interest rate, high collateral security, poor road networks, inadequate warehouse, smuggling of cocoa across boarders, congestion at various cocoa Taken-Over Centres, bad weather conditions, pest and disease, inadequate quality control officers. Significant investments are recommended to overcome the challenges facing cocoa purchasing and the cocoa sector in general. The study recommends adequate investments in warehousing facility across all cocoa growing districts and all cocoa growing regions in Ghana, cocoa price volatility can be controlled by COCOBOD through hedging and forward contracts, smuggling of cocoa by formulating anti-smuggling laws, dialogue with cocoa farmers, increase cocoa price. The study makes a significant contribution to literature on cocoa purchasing within Ghana’s Cocoa Sector by developing a checklist identifying probable challenges at each stage of cocoa purchasing supply contract process and how each challenge can be evaluated, and mitigated. This is expected to help ensure purchasing performance among LBCs and thereby improves the overall efficiency and effectiveness of COCOBOD, and all partners directly involved in the entire cocoa supply chain process.

Source: KNUST