Ghana Cocoa Board (Cocobod) owes nearly GHS 4 billion to Licensed Buying Companies (LBCs), jeopardising cocoa purchases for the upcoming 2026/27 season. This significant outstanding debt could prevent LBCs from securing necessary funds to buy cocoa from farmers.
The Chamber of Cocoa Marketers Ghana issued this warning, highlighting the severe financial pressure on LBCs. Many companies struggle to service existing loans taken to finance previous cocoa purchases. Without these payments, LBCs cannot access fresh capital for the new season, which begins soon.
This situation fits into a broader narrative of financial strain within Ghana's agricultural sector and public corporations. Cocobod, a major state-owned enterprise, often faces challenges in securing timely financing for its operations. The cocoa sector contributes significantly to Ghana's Gross Domestic Product (GDP) and foreign exchange earnings, making its smooth operation critical for national economic stability. Delays in payments have historically impacted farmer livelihoods and the overall supply chain efficiency.
Victus Dzah, Chief Executive Officer of the Chamber of Cocoa Marketers Ghana, stated, "Cocobod has not paid us. How are we going to go back to the field to buy cocoa?" He explained that some LBCs borrow at interest rates as high as 40 percent just to stay afloat. Prolonged payment delays have already led to the collapse of some companies, he added, underscoring the urgency of the situation.
The immediate implication is a potential disruption in cocoa procurement, which could affect Ghana's position as a leading global cocoa producer. Farmers might face delays in receiving payments for their produce, impacting their income and planting decisions. Decision-makers at Cocobod and the Ministry of Food and Agriculture must address the financing gap quickly to prevent a crisis.
Beyond the debt, the Chamber also raised concerns about Ghana's new cocoa pricing mechanism. This system guarantees farmers 70 percent of the Free on Board (FOB) price. Mr. Dzah cautioned that a substantial increase in the farmgate price could create a wide price difference with neighbouring Côte d'Ivoire. Côte d'Ivoire opened its 2026/27 cocoa season at 1,200 CFA francs per kilogramme.
A significant price disparity between Ghana and Côte d'Ivoire could incentivise cocoa smuggling across borders. Ghana previously lost considerable cocoa volumes to Côte d'Ivoire during the 2023/24 season when prices were higher there. This historical precedent highlights the risk of such a policy, potentially undermining Ghana's cocoa output and quality control efforts.
Mr. Dzah called for robust measures to contain any anticipated increase in cocoa smuggling. He stressed the importance of protecting the quality and integrity of Ghana's cocoa beans. The Chamber also seeks clarity from Cocobod regarding its financing plans for the 2026/27 season. Cocobod announced intentions to raise funds through commercial paper and bonds.
However, LBCs report a lack of engagement on these proposed financing arrangements. "We are in the second week of September. Nobody has called us to tell us anything about what is going on," Mr. Dzah lamented. This lack of communication adds to the uncertainty and financial stress faced by the buying companies. Transparent communication and clear operational plans are essential to restore confidence and ensure a smooth cocoa season. The government's commitment to the cocoa sector will be tested by its response to these pressing financial and policy challenges.