Well, “broke” is not a policy word, so it is hard to join the raging debate about the brokeness or otherwise of Ghana if one is more biased towards policy activism.

I will say this though, when Multimedia, a major Ghanaian media outlet, invited me to deliver a ten minute “statement” on an important national issue on the first edition of their primetime show, Newsfile, today, I knew I had to talk about Ghana’s finances.

Whereas “brokeness” is not rigorous enough a term for gauging the finances of a country, “creditworthiness” is. Like most businesses, most countries require debt to function. Globally, we have seen a surge of public debt for this very reason.

Global public debt as a share of GDP and in absolute terms has risen substantially over time. Source: IMF (2020)

Globalisation means that, more and more, governments borrow from investors and savers all over the world, not just in their own countries. 17 African countries (out of 55) are today able to borrow from private investors around the globe (not just from other governments and institutions like the World Bank and IMF). How these investors view the creditworthiness of the borrowing country/government offers one of the most objective metrics in gauging the finances of any country.

Such investor sentiment can be discerned from how much they are willing to charge in interest before they lend to a government. For a while now it has become clear that compared to its African peers, international investors prefer to lend to Ghana at a higher rate, clearly a sign that they are more worried about Ghana’s “credit risk”.

Note that this growing tendency among investors to price in higher risk for Ghanaian debt has been apparent well before COVID-19 struck. But in recent months things have come to a head and Ghana is now grouped globally with countries like Lebanon and war-troubled Ethiopia in terms of debt riskiness.

What accounts for this? Well, since the country became the first on the continent to borrow from the Eurobond market in 2007 (on the back of its first sovereign credit rating in 2003, 3 years after continental pioneer, Senegal), it has been more enthusiastic than most in frequenting the market for more. A combined oil and gold boom from 2010 onwards underwrote this appetite and increased awareness of the Ghana sovereign lending opportunity globally. Before long, all the gains from the HIPC debt relief it secured in the early 2000s had been whittled away. At the end of Ghana’s HIPC program, it owed just 1.18 times more than the revenue the government collects. Today, it owes nearly 5.4 times more.

Towards the completion point of the HIPC program in 2004, the country’s absolute spending on its debt had dropped to barely a little over $100 million. Today, the government requires a whopping $6 billion for the same purpose.

Spending in absolute, nominal, terms on debt servicing in the first decade of the 4th Republic. Source: Bank of Ghana (2005)

The reason is simple. Take 2021, for instance. The government needed to find $18 billion to make good on all its obligations. It could only raise $12 billion from investment, taxation and operations. An important nuance: these are “net” flows. To fully appreciate the hand-to-mouth nature of the situation, consider that in the same year it actually borrowed $5.2 billion from overseas sources, but promptly used $2.55 billion in paying back some of what it owed from previous rounds of borrowing.

In terms of the burden of debt on national finances, Ghana bears twice that of the average African country.

Ghana’s 83% effective debt to GDP ratio is more than double that of the average peer African country. Source: EIU
Ghana spends nearly half of all its revenues servicing its debt compared, way above what most of its peers spend. Source: S&P (2020)

The announcement yesterday by Fitch, one of three major global companies that assess the creditworthiness of countries, that it will downgrade Ghana’s sovereign credit rating to B-, with a negative outlook (meaning that it is more likely to downgrade further than to upgrade) should therefore not have come as a surprise. But it is very significant for a number of reasons.

First, it can be argued that Fitch has been a bit more lenient with Ghana than some of its peer rating agencies historically. Given investor sentiment on Ghana’s credit risk, its ratings could actually have been worse than it has recently been.

Ghana’s Fitch rating in recent times judged by its investor credit risk perception can be argued to be somewhat favourable compared to peers. Source: Aykut, Oppong & Awanzam (2016)

Fitch’s negative outlook is particularly concerning because the B- rating places the country at the border with countries on the verge of defaulting on their debt. Any further downgrade will therefore seriously prolong the country’s shutout from the international private capital markets.

Ghana cannot afford to slip into the C and D rating bands so Fitch’s negative outlook is worrying. Chart credit: Sasol PLC

To reinforce the point, this is Fitch’s worst rating since it began covering the Ghanaian economy nearly 20 years ago. The country now has the dubious honour of joining Tunisia and El Salvador as B- peers with a negative outlook.

Ghana enjoyed relatively good ratings from Fitch during its first decade on the international capital markets. The current rating marks a new low. Source: TradingEconomies

Ghana has already been in doldrums territory as far as Moody’s and S&P are concerned, so a negative outlook is expected across the board. That seems pretty bad, so how does the government explain things?

The general posture of the country’s economic managers has been to blame COVID for the short-term issues (though, as shown in previous sections, the malaise clearly predates COVID), and low tax compliance by the population for all the other, more chronic, problems.

The chart below summarises the government’s favourite point.

In sum, in the government’s view, Ghanaians pay too little tax compared to their compatriots elsewhere, even in other African countries. True? Maybe. But there are important nuances to note before one starts comparing apples and oranges.

Take a very good look at the countries clustered around Ghana in the chart above, i.e. Ghana’s peer tax laggards. You will notice something curious that is also borne out by the two charts below.

Even a cursory glance will tell you that high natural resource dependency and a strong extractives/commodity sector correlates roughly to lower tax-to-GDP ratios. This is intuitive. Even without the usual rigour of multivariate regression analysis, one can hint at the tendency of extractives to inflate output numbers without necessarily boosting state revenues. That this claim is not some fluke of overzealous correlationism is supported by similar findings beyond Africa.

An outsized extractives sector appear to suppress the tax to GDP ratio of countries. 2020 numbers. Chart credit: World Bank, Australian Parliament & OECD.

Commodity supermajor, Australia, has a tax to GDP ratio of about 24% whilst less commodity-dependent France reports a hefty 45%. An even better contrast can be got when one compares two economies similar in many respects except in relation to the scale of their commodity involvement. Norway hovers around 25% for our metric of interest, whilst Denmark has been known to breach the 48% mark.

Even close-enough peers like Denmark and Norway can exhibit considerable variation in tax-to-GDP metrics due to commodity effects. Chart credit: CEIC Data.

It is very unlikely that such large differences between Australia and France, Denmark and Norway, or Brazil and Uruguay, can be put down merely to tax collection efficiency or citizen compliance. Nor, clearly, is this strictly a matter of absolute diversification of the economy.

In light of the above, it is reasonable to argue that compared with its true peers on the African continent, Ghana’s tax take (which by the way has now converged with the Sub-Saharan average of about 15%) is pretty unremarkable. Exceptionally low tax revenue for the size of the economy cannot be the reason why the country’s creditworthiness is taking such a hit.

Misdiagnosing the problem however leads to half-baked ideas such as the e-levy, which we have discussed at length here and here. I will sum up our previous conclusions as follows:

  • The Government’s estimate of making $1.15 billion from the e-levy is overly rosy. Countries like Kenya have been using similar taxes for more than 10 years. Uganda went the same route more than 3 years ago. None of them have been able to rake in fantastical sums. MTN, responsible for 92% thereabouts of transactions in the Ghanaian mobile money space makes about $216 million from unit fees. Adjusting for the facts that Uganda has a fifth of Ghana’s mobile money transactional scale and that it applies less than one-third of Ghana’s proposed rate, Uganda’s $27 million per annum take may translate to about $350 million in Ghana’s case. Far from making a dent in a $6.5 billion fiscal hole. In sum, e-levy is not a major part of the answer.
  • The current design of the e-levy lacks any backing in serious modelling. Its elements are purely arbitrary. If that remains the case, the tax could seriously distort behaviour and drive the emerging digital economy and its players more into the informal rather than the formal bracket. This will undermine larger digital taxation strategies currently being designed by the Ghana Revenue Authority with the help of the British Government. As more business shifts to currently informal digital channels like Instagram, WhatsApp and TikTok, careful thinking is required to figure out how to craft policies for e-commerce that don’t end up burdening the few formal operators.
Formalising the emerging digital economy will require a far more cleverer, dynamic, and responsive strategy than what has been tried in the traditional sector. Source: Amolo & Porteous, CGD (2018)
  • Presently, digital money is mostly used to drive off-line transactions. To truly deepen the country’s digitisation drive, smarter strategies are needed to boost in-app purchases and online transactions. A cleverer digital taxation strategy can achieve that. A blunt instrument will only deepen the cash-like use of digital money, thus forgoing the true benefits of digitisation.

Moreover, overconcentrating on tax compliance and collection can distract from other important features, especially when misdiagnosis leads to drawing the wrong lessons from other jurisdictions. For example, one major compositional difference between the rich world and places like Ghana, as far as tax structure goes, is the former’s strong reliance on social security taxes, which reflect demographic and industrial factors that don’t apply in Africa.

Another design blind spot created by excessive focus on collection alone is the tendency not to look at categories of taxation that already constitute major sources of revenue, like VAT. Yet, research shows that Ghana’s VAT structure is rather inefficient.

Add to the above the issue of “exemptions” that has never really benefitted from broader stakeholder consultation and the scale of neglect becomes even clearer.

Indeed, poor stakeholder engagement accounts for the inability of the government to take on public spending, by far the most critical gap to be filled if Ghana is to climb out of its current revenue crisis. Because the government never genuinely invites stakeholders to contribute to policy formulation and merely pretends to listen and then goes ahead to do what it always intended to do anyway, cross-elite buy-in tends to be weak. When painful sacrifices are required, it suddenly becomes obvious to everyone that the government simply does not have the necessary credibility to rally the population.

Furthermore, the government and bureaucratic classes are themselves not genuinely interested in tackling waste in public spending head on. Genuine cooption of independent-minded stakeholders in the academic, civil society and opposition benches in Parliament would lead to hard questions the government has no appetite for.

For example, Civil Society Organisations would insist on truly independent evaluation of a whole raft of government programs that have become mere troughs of patronage for the politically connected. They will ask for a thorough, rigorous, non-partisan review of the more than 40 so-called youth employment programs in Ghana, and demand evidence that they are indeed adding value.

A bewildering mishmash of government interventions in the youth employment sector is sowing more confusion than solving any clear problem. Source: World Bank (2020)

The last time a government slipped and allowed such an independent review, it was discovered that as much as $317 million may have been wasted in one program – GYEEDA – alone.

Whilst the government spends tens of millions of dollars on so called entrepreneurship and employment schemes that it refuses to subject to a truly multistakeholder review, the one area that serious research has established could make a genuine dent in youth unemployment – technical & vocational education (TVET) – continues to suffer neglect.

For decades, TVET has received less than 2% of the total education budget. Whilst the government was busy pouring millions of dollars into evident scams like the so-called “venture capital trust fund” (where officers invented fictitious companies and used them to pocket the cash), purportedly to resource entrepreneurship as a solution to unemployment, it was also sashaying around Accra, cap in hand, begging the likes of DANIDA for $14 million to invest in youth technical skills.

Clearly, the issue is not that Ghana is broke but that it is broken. To mend its broken policymaking and restore the country to creditworthiness, the government and its enabling political class must admit the brokenness of the current public finance model and solicit genuine multistakeholder support to cut another path.

Ghanaian social media activists were relieved after Ghana’s food safety regulator (the FDA) broke months of silence on consumer complaints about curdling canned evaporated milk made by Swiss food giant, Nestle. 

FDA recalls batches of coagulated evaporated milk products from Nestle  after consumer complaints - MyJoyOnline.com
Coagulated Ideal Milk has drawn the ire of Ghanaian social media activists. Image source: MyJoyOnline

As discussed in my previous post, the FDA’s silence despite having been intimately involved in Nestle’s investigation into the milk “coagulation” problem exasperated activists who kept the pressure on until today’s regulatory notice recalling 24 batches of the popular Ideal and Carnation evaporated milk brands.

FDA Recalls Batches Of Coagulated Evaporated Milk Products From Nestle -  Ghana's News Portal
FDA Regulatory Notice dated 10th January

In my own, quite belated, comment on the subject, I reduced the crux of the issue to whether a biological agent was the cause, in which case a safety issue was highly likely, or if instead a quality deviation that only impacted presentation might be the situation. 

The FDA says its investigation has revealed the culprit as a batch or batches of milk powder, the key ingredient in the recalled products, sold to Nestle by a supplier or group of suppliers. Somehow, when “reconstituted” and “recombined” to prepare the evaporated milk product, the end result fails expected heat stability performance. This is a well known hurdle to cross when using milk powder to make evaporated milk.

The inference here is that some supplier vetting and quality assurance processes failed, batch control was faulty, and remediation has struggled to fix this for at least 6 months now judging by the recency of some of the batch dates. Still, no safety issues were found and no contamination has been established in laboratory tests for any microbial candidates.

 So, for now, activists can breathe a bit easy. But, for me, the whole episode raises intriguing policy issues that transcend this specific health & safety scare. Why is Nestle using milk powder rather than fresh milk as it does elsewhere? Before we discuss that, bear with me as I meander on a detour of industrial policy with a geopolitical twist.

In the year that Britain broke Asante power in the then Gold Coast (now Ghana), the two halves of what became Nestle had their seminal moments. The British controlled half, Anglo-Swiss company, commenced their UK expansion from Cham by buying the Condensed Milk Company. On the continent, meanwhile, Henri Nestle sold out to more energetic investors in Vevey. Anglo-Swiss and the renamed Farine Lactee Henri Nestle would, after decades of bruising rivalry, merge 31 years later (in 1905, that is) to create what would become the world’s largest and most formidable food giant.

In the same vein of momentous dates, Nestle entered the Ghanaian market in 1957, the year of Ghana’s independence from Britain, to market products made in Europe. It will take 11 years before local manufacturing started, and by 1971 the famous ideal milk was rolling off manufacturing lines in Tema.

For many years, the Government of Ghana owned a quarter of Nestle stock through the state-owned industrialisation-focused bank, the National Investment Bank (NIB). When the joint venture between Nestle and NIB started in 1971, NIB actually owned 49% of the company. Subsequently, the socialist military government of General Acheampong took over and increased state shareholding to 55%.

For nearly 20 years, therefore, the Ghanaian government was the principal shareholder in Nestle. The privatisation wave of the 90s did see the shareholding structure revert to 51% in favour of Nestle in 1993. But Ghana still had plenty of shots to call. Throughout this period also, the Tema plant was Nestle’s only milk processing factory in West Africa (by the way, Nestle’s West & Central African operations have been run from Accra since 2005). Unsurprisingly, production of processed dairy in Ghana increased from about 3 million litres in 1984 to over 30 million liters in the mid-nineties.

It is mind-boggling that despite the influence of the Ghanaian political and policy elite on Nestle’s operations in the region, in the boardroom and elsewhere, the long mulled “integrated dairy value chain” to supply fresh milk has never taken off in Ghana.

In Northern Nigeria, Nestle has invested substantially in developing fresh milk value chains based on Fulani cattle breeds. Nestle’s first zero-emissions dairy farm is in Southern Africa. Nestle Zimbabwe has been investing directly in cows. After concerted business ecosystem efforts, Nestle committed to local dairy value chains in Kenya and Uganda. Some observers have already noted a surge of investor interest in Africa’s dairy prospects because of such growing engagement by the likes of Nestle, Arla and Danone.

Yet, Ghana has mysteriously failed to capitalise on its pioneering dairy industry, exemplified by Nestle’s and Fan Milk’s presence in the country long before regional neighbours got their mojo. Despite Ghana’s head start, countries like Senegal, which is positioning for 70% self-sufficiency in milk, are steadily leaving the country in the dust.

When Erik Emborg introduced the Fan Milk brand in Ghana in 1960, the momentous year of the country’s republican status, the plan, backed by the Government, was very much to embed the operation in the planned integrated dairy complex, complete with local farms. The idea went nowhere and Erik just went on importing milk powder from Scandinavia.

According to dairy researchers, Bonodong Guri, Godwin Ameleke and their collaborators, Ghana’s production of milk, 90%+ of which comes from free ranging cattle, has stayed stagnant at between 36,000 and 43,000 tonnes for over two decades. Compared to 420,000 tonnes of production in next door Burkina Faso (a ten-fold difference). Benin, much smaller and situated in a similar tropical terrain as Ghana, clocks roughly 150,000 tonnes per year. This is no tsetse fly matter.

That there is something spectacularly off about appreciation of the dairy opportunity in official circles is borne out by the failure to capture any significant interventions targeted at boosting fresh milk production in the 5-year initiative known as Rearing for Food & Jobs, the government’s flagship livestock development program, launched in 2019. Indeed, the biggest intervention seen in Ghana’s dairy sector to date may have been the importation of the White Fulani breed of milk cattle from Nigeria by the Colonialists in 1930.

Yet, there is no shortage of critical needs in the beleaguered industry. Water scarcity; a dilapidated veterinary service; lack of genetic breeding technologies; zero cold chain infrastructure across most of the value chain; and a severe absence of commercial scale pasture are a couple of the most prominent.

In 1999, in response to these age old challenges, donor funds made possible a decade-spanning attempt to revive Ghana’s abandoned cattle stations in Nungua, Amrahia and elsewhere. Cross-breeds that can increase milk output per cow by 600% were developed. Supply of tens of thousands of litres of milk to Fan Milk, Ghana’s main ice cream producer, and other processors became possible. Over a ten year period, the performance of the Friesen x Sanga cross-breeds (initially introduced into Ghana in the 1960s from the Netherlands and the UK) were celebrated at various conferences. Then it fizzled out slowly.

These days, the government of Ghana spends about $120,000 a year paying workers at the Amrahia Station. It does not budget for operational or capital expenses. Rather, it expects handouts of less than $20,000 a year from donors for that. The biggest investment into the vaunted national integrated dairy complex vision launched in 1965 in the last three years have been some purchases of artificial insemination kits and bovine semen from the Netherlands capable of adding about 300 calves to Ghana’s herd of about 2 million cattle.

When in 2019, Government took over the 24% stake held in Nestle by NIB as part of a cash swap to save the latter from insolvency and help it meet minimum capital requirements, there was a brief period of hope that something strategic may be done. Instead, the transaction has today become clouded in opacity as stakeholders are kept in the dark about plans to offload the shares to private interests.

Meanwhile, imports of milk powder continue to surge.

Import volumes of dairy products into Ghana. Source: International Trade Center (2020)

Self-sufficiency remains stubbornly stagnant.

Local production has stagnated whilst consumption rises. Source: Food & Agriculture Organisation (2018)

And talks with Nestle to procure locally, especially from Amrahia, have still not been backed by any serious policy coordination. But given the multiple ecosystemic issues involved, pure private action, in the face of a highly disabling environment, would falter. Not surprising then that the other 10 major dairy processing companies in the country also resort to imports for virtually all their needs, despite episodic domestic sourcing drives.

Beyond the safety, branding and trust issues that surfaced during this whole Nestle Milk saga, what may endure is the opportunity it has provided for the public to move beyond the political PR flourish of projects like 1D1F and Rearing for Food & Jobs. Because, by so doing, the people of Ghana may then be able to take a hard look at how policy on critical matters like “integrated value chains” is actually executed by the modern State of Ghana.

Yesterday, I saw this intriguing clipping of a press release-like ad by Nestle in Ghana about its mega-brand, Ideal Milk.

Nestle Ad in Ghanaian Newspaper

The primary message in the ad can be distilled into three lines:

  • Some liquid Ideal Milk cans on the market have coagulated contents (the fluid has become viscous/thick).
  • The product will not harm anyone who consumes it.
  • Customers who are nevertheless worried about the product should reach out to Nestle directly.

I was fascinated by the ad because:

  • I like Ideal Milk;
  • I have spent two decades of my life in product safety, consumer protection and supply chain; and
  • I have recently developed a fascination for the history of food canning;

The value proposition of Ideal Milk, in the wider universe of “evaporated milk”, is “creaminess”. As far back as the 1920s, Nestle was packaging the goodness of ideal milk as being about the cream. Normal cow milk doesn’t always have the frothy cream when you want it and in the amount you need. But Ideal Milk does. It is always creamy. Of course, creaminess must taper off at a point, hence the recent outcry.

A Nestle ad from the 1920s. Courtesy of Mary Evans Prints.

Like much of the rest of the food canning industry, it was war that dramatically catapulted canned evaporated milk onto supermarket shelves. The need to send soldiers around the world and keep them for months on the battlefront called for a modern food logistics system that greatly favoured canning. The balance of necessity and accessible luxury has long been a key brand positioning factor for the canned evaporated milk industry even as a host of health concerns, ranging from lactose intolerance to concerns about weight gain and cholesterol, have chipped away at the product’s place in shoppers’ hearts.

Nestle banks on wartime patriotism to brand evaporated milk as essential. Courtesy of the Imperial War Museum.

How then does one achieve “consistent creaminess” (luxury) and long shelf life (necessity) together? By adding vegetable fat to fresh cow milk and then applying heat treatment and other techniques, such as homogenisation.

The first person to try and commercialise evaporated milk production was Nicholas Appert, in response to a challenge by Napoleon Bonaparte to French chemists to come up with ways for the Emperor to feed his conquering armies in far-flung battlefields. But it would take about a hundred years more for the likes of Borden, Joseph House, and John Meyenberg to perfect and patent the necessary processes. Mass consumer acceptance was not assured until critical steps like homogenisation, sterilisation, and standardisation could be mastered, balancing creaminess, long shelf-life and taste. In 1923, the Evaporated Milk Association emerged to codify what had been learnt on the way to this point.

This “codification” was given the force of law by the United States government in the same year of 1923. The US continued to be a pacesetter in setting standards, with major updates in 1939 and 1940. Today, its Department of Agriculture frames the standard in terms of minimum solid fat content as follows:

Evaporated milk is the liquid food obtained by partial removal of water only from milk. It contains not less than 6.5 percent by weight of milkfat, not less than 16.5 percent by weight of milk solids not fat, and not less than 23 percent by weight of total milk solids (21 CFR §131.130(a)).

In the course of time, however, global standards have emerged. The Food & Agriculture Organisation, a UN agency, now maintains the Codex Alimentarius, the most authoritative handbook of food standards in the world. The specification for evaporated milk in this code is captured by standards, such as: CODEX STAN 281-1971 and CODEX STAN 250-2006.

Here is the Codex definition:

A blend of evaporated skimmed milk and vegetable fat is a product prepared by recombining milk constituents and potable water, or by the partial removal of water and the addition of edible vegetable oil, edible vegetable fat or a mixture thereof, to meet the compositional requirements in Section 3 of this Standard.

The minimum solid fats content is specified as:

  • Minimum total fat: 7.5% m/m
  • Minimum milk protein in milk solids-not-fat(a): 34%

It is natural when confronted with a situation, as we have it now, where a product meant to be sold in liquid form presents as a thick pasty, semi-solid, sludge, to focus on the part of the standards that seem most applicable to the physical state of the product. But as should be clear from the above, the standards seem silent on the upper bound of solids in evaporated milk. What this clarifies is the fact that, generally, standards are minimalist when it comes to presentation. But not when it comes to safety.

Which brings us to the heart of the matter (sorry for the longwinding detour, I could not resist throwing in some hobbyist tropes). Nestle admits “coagulation” in some packs of ideal milk in response to widespread reports.

Man in Ghana Opens Ideal Milk & Finds Tom Brown Porridge Inside
Ghanaian Social Media is rife with reports of “coagulated Ideal Milk”. Image Credit: Ebenezer Quist, 23/09/2020

They do not specify which batches. On the basis of “collaboration” with the Ghanaian food regulator, the FDA, they are confident that the coagulated milk is safe.

Interestingly enough, there is a very long history of evaporated milk coagulation, dating back to the very early days of the product’s commercialisation. In 1915, a large “outbreak” of incidents involving consumers complaining about coagulated evaporated milk was reported in the US State of Iowa. William Sarles and Bernard Hammer investigated this incident thoroughly and identified a particular bacterium, Bacillus coagulans, as the microorganism responsible.

Extract from William Sarles’ account on their investigations into Bacillus coagulans.

The primary discovery here was that notwithstanding effective pasteurisation and sterilisation, there exist some bacteria that can evade the controls, infect the can and, during storage, coagulate the liquid milk.

Since these pioneering studies, our understanding of the impact of thermophilic and thermoduric bacteria on evaporated milk has improved greatly. We now know that spores of Bacillus stearothermophilus, for instance, will lie dormant in the can until storage temperature exceeds 40 degrees celsius at which point they will activate and start to attack the milk.

Virtually all the reports of Ideal Milk coagulation I have seen so far do not mention odour, putridity, colour changes or blotches. Curdling and thickening are the only features mentioned. This more or less rules out the worst kinds of fermenting bacteria. But it does not rule out thermophiles like B. coagulans and Bacillus cereus.

Now, for a bit of relief. Bacillus coagulans are today widely believed to act as a probiotic, which means they are generally safe in the human gut.

Bacillus Coagulans - 60 Capsules — — Seeking Health
B. coagulans marketed as a food supplement.

Same, unfortunately, cannot be said for B. cereus, whose proclivity for contaminating ultra high treated milk is now a growing focus of research.

Incidence of Bacillus cereus, Bacillus sporothermodurans and Geobacillus  stearothermophilus in ultra-high temperature milk and biofilm formation  capacity of isolates - ScienceDirect
How B. cereus attacks pasteurised milk. Credit: Alonso, Morais & Kabuki (2021)

B. cereus is now routinely implicated in some forms of food poisoning.

Foodborne Illness Caused by Bacteria - ppt video online download
B. cereus disease causing profile. Credit: Myla Argente, 2016

In short, so far, no reports have come in to suggest that people are getting sick from consuming Ideal Milk. The most worrying form of coagulation would be that caused by microorganisms. But, as explained above, some microorganisms that cause coagulation are completely harmless. Non-biological causes of coagulation, on the other hand, are mostly related to the persistent challenge of fat separation. Ineffective homogenisation is the most widely cited culprit for this situation. Generally, the process of sterilising milk to increase its shelf-life would itself cause coagulation. To maintain the liquid state of the product, as well as ensure heat stability, delicate calibration of multiple factors is required. Casein content measurement, precise heat regulation, homogenisation, and even salt use must all be carefully modulated.

Understanding the impact of key production steps on in-storage coagulation of evaporated milk. Credit: Maxcy & Sommer (1954)

Thus, the coagulation being witnessed could be the effect of a homogenization failure or related fat regulation issue, such as lecithin use and concentration. Whilst this may raise Good Manufacturing Practice (GMP) questions, not all quality variability issues are automatic GMP breaches, and not all GMP breaches are automatic health and safety issues. There are varied thresholds and caveats, and everything depends on how exactly the variability occurred.

That is why a matter such as this cannot be left to the brand communications strategy of the manufacturing entity involved. The ambiguity and multiplicity of potential causes and effects require that someone other than the manufacturer be involved in communicating with the public. Whilst Nestle has involved the FDA in its investigations, and appropriately so, the press release does not rise to the appropriate level of public assurance. It does not explain why this is not a health and safety issue. There is no independent corroboration that the remedial measures taken to address the root cause are adequate. This is not about protecting the brand of a giant multinational; it is about safeguarding the health of millions, or at least securing their peace of mind.

Talking to people affected by this incident, however, I get the sense that there is a fundamental philosophical conundrum at play here. Some people say that they trust Nestle more than they trust the Ghanaian FDA. It is hard to blame such people. Senior officials of the Ghanaian FDA have in recent times been caught taking bribes in connection with similar GMP, health and safety matters. Some argue that Nestle, despite its occasional run-ins with activists, and not fully atoned for history with baby milk formula, has additional oversight at a global level that may be more stringent than what the local regulator has in place.

So, it is a brand issue after all: it all boils down to the level of trust among the general public. One cannot milk a brand one has not built.

Nonetheless, my personal view is that the regulator has more to do to earn and hold the trust of the general public than Nestle. The latter after all is, first and foremost, in business to make money. If it genuinely believes that its products are not contaminated, it is not difficult to see why it will be reluctant to take steps, like a mass recall, that will not only cost it lots of money but potentially also damage one of its most lucrative brands. A regulator, on the other hand, must balance multiple considerations and strive to be candid and transparent in all its dealings regardless of financial considerations.

The fact that the FDA has so far refused to share its own findings for nearly six months is a serious abdication of its duty to the public. Even if public cynicism and distrust of such vital institutions are sometimes unfair, the FDA has every opportunity to redeem its own brand.