“The decline in the prices of the traditional exports of Ghana, especially gold, cocoa and forestry products highlights the need for greater diversity in the promotion of alternative exports. Stated simply, greater diversity is needed to reduce the dependence upon exports confronting extremely unfavourable long-term demand conditions. The demand for primary products, especially cocoa, is both price and income inelastic in the advanced economies. The inevitable consequence is that as world output expands (note the projected future increase in cocoa production in both Malaysia and Indonesia) total income generated from this activity actually declines. Increased Ghanaian productivity in terms of output and yields, serves merely to depress farm incomes, foreign exchange earnings and tax revenues.”
