The political economy of pricing and Ghana’s cocoa marketing system

The Ghanaian economy relies heavily on the export of cocoa beans to generate foreign reserves, and many Ghanaian citizens rely directly or indirectly on cocoa beans for income generation. The cocoa bean price is highly volatile and largely determined at the international commodity exchange in London. Volatile prices translate into volatile revenues, income, and exchange rates, which pose challenges for the Ghanaian government to manage its internal and external balances. We build on John R. Commons’s institutional economics and propose an institutional theory of price to understand the pricing mechanisms along the cocoa chain. Drawing on interviews with cocoa stakeholders in and outside of Ghana between 2024 and 2025, we first map pricing points along the cocoa chain following our institutional theory of price and second, provide a political economy analysis of cocoa pricing and price uncertainty. We argue that Ghana’s price risk is managed by its counterparties to its disadvantage, with large multinational companies reaping the benefits from the institutional pricing arrangement. We conclude with tentative considerations about how this could change.