Ghana Cocoa Board (COCOBOD) is introducing a tranche-based commercial paper programme. This initiative will launch before the 2026/2027 cocoa season. It aims to reduce financing costs and increase local involvement in cocoa funding. The programme will raise working capital through commercial paper issuance. These papers will target pension funds, commercial banks, and international cocoa buyers. The issuance is estimated at about GHS 14 billion (US$1 billion equivalent) in cedi-denominated instruments.
This new structure allows COCOBOD to raise funds incrementally. Previously, the entire financing requirement for a season was borrowed upfront. This incremental approach will improve liquidity management. It will also reduce significant interest expenses. COCOBOD will draw funds only as cocoa purchases are made. It will repay investors as cash flows become available from cocoa exports. This strategy reduces the cost of holding unused funds.
This move is a key part of government efforts. It aims to shift away from the offshore syndicated loan structure. This structure financed cocoa purchases for over 30 years. Under the old arrangement, COCOBOD secured pre-export facilities. These ranged between US$1 billion and US$1.5 billion annually. Ghana’s debt crisis and rising global interest rates made this model difficult to sustain. The syndicated facility's size dropped to US$800 million for the 2023/2024 season. Its borrowing costs also rose considerably.
Ato Boateng, COCOBOD’s Deputy Chief Executive for Finance and Administration, confirmed significant progress. He spoke on the sidelines of the Ghana–UK Investment Summit in London. "We have made significant progress and engaged all necessary advisors to support the issuance process," he stated. Mr. Boateng indicated that advisors are finalising the financing structure. They are also addressing all regulatory requirements and concerns.
The programme could help deepen local capital markets. It may also reduce exposure to foreign exchange risks. These risks are common with dollar-denominated borrowing. The proposed issuance is being closely watched by investors. It will serve as a measure of confidence in Ghana’s domestic debt market. This follows the 2022/2023 Domestic Debt Exchange Programme (DDEP). The financing reforms address COCOBOD’s operational and financial pressures. COCOBOD has liabilities of about GHS 32 billion. Approximately GHS 11.9 billion is due for repayment in 2025. Licensed Buying Companies are also reportedly owed about GHS 10.1 billion. This contributes to liquidity constraints in the cocoa supply chain.
COCOBOD envisions pension funds as a strong source of capital. Commercial banks will also play a central role. COCOBOD is exploring mechanisms to strengthen their participation. This includes bringing Development Finance Institutions on board. This will enhance the lending capacity of participating banks. The revolving nature of this new structure will allow funds to be raised, deployed, and repaid within a single crop cycle. This cycle uses cocoa export receipts. This innovation seeks to provide greater flexibility in managing seasonal financing requirements.