Profit and profit distribution along Ghana's charcoal commodity chain

Are lucrative charcoal markets in Africa reducing poverty for people in the trade? In spite of its economic significance, the extent to which charcoal income reduces poverty is debatable. This article applies commodity-chain analysis to Ghana's charcoal commodity chain to describe the characteristics of actors, and to quantify and explain the profits reaped by the different actors in the chain. We estimate that profits of US$66 million are generated annually. The distribution is highly skewed between and within actor groups, with 22% of profits reaped by merchants, who make up only 3% of the actors in the market. The majority of producers and retailers, by far the largest groups in the sector generate incomes below the national minimum wage. Women dominate the market in terms of number of persons involved. Women and men earn equal incomes at all levels of the market except at the production level, where men reap higher profits than women. People from several ethnic groups engage in the market, but members of the Sissala and Asante ethnic groups are the most frequently encountered ones throughout the chain. Improving equity along the charcoal chain will require breaking the interlocking credit-labor arrangement that enables merchants to have control over charcoal prices, and improving producers' access to urban markets. The paper makes policy recommendations in this regard.