The Ghana Cocoa Board has announced plans to roll out a new funding model for Ghana’s cocoa sector ahead of the 2026/2027 crop season, as part of broader reforms aimed at ensuring price stability, sustainable farmer incomes, and stronger local participation in cocoa financing.
Chief Executive of COCOBOD, Randy Abbey, disclosed the development during a high-level panel discussion on Pre-Export Liquidity and Long-Term Capital at the Africa Cocoa Finance & Investment Forum 2026 held at the London Stock Exchange.
According to Dr Abbey, Ghana’s cocoa industry has depended for more than 30 years on syndicated loans backed by forward cocoa sales to finance annual crop purchases. While the system has helped provide liquidity for cocoa purchases over the years, he noted that it has also tied a substantial portion of the country’s cocoa output to offshore financiers.
He explained that under the current structure, between 70 and 92 per cent of Ghana’s cocoa crop is often collateralised to external financiers, a situation he described as unsustainable and one that highlights the need for a major policy shift.
“The new funding model will come with a new pricing mechanism which will involve periodic reviews, possibly quarterly, and will be applied across the crop season,” Dr Abbey stated.
Under the proposed arrangement, COCOBOD plans to raise financing through instruments such as commercial paper and commercial notes while leveraging domestic liquidity and attracting participation from institutional investors within Ghana.
Dr Abbey said the reforms would maintain the longstanding policy of paying cocoa farmers 70 per cent of the Free-On-Board (FOB) price while introducing more flexible pricing reviews to reflect movements in global cocoa prices and exchange rates.
According to him, the primary goal of the reform is to protect cocoa farmers from sharp fluctuations in global market prices while ensuring the long-term financial sustainability of the cocoa sector.
He further indicated that the model is expected to broaden participation in Ghana’s cocoa economy by improving financing opportunities for local processors, indigenous Ghanaian firms, and domestic investors. The move is also expected to help retain more value within the country instead of depending heavily on foreign-backed financing arrangements.
Dr Abbey expressed confidence in Ghana’s financial sector and its ability to support the transition, pointing to improving macroeconomic conditions and increasing investor appetite for structured financial instruments.
He acknowledged concerns raised by stakeholders, including Licensed Buying Companies and investors, regarding the scale and structure of the proposed financing framework. However, he assured that a comprehensive prospectus outlining participation opportunities is being finalised and will be fully explained before implementation begins in the 2026/2027 crop season.
The forum where the announcement was made was organised by Cocoa Trade and Invest Africa in partnership with the International Cocoa Organization and the United Kingdom office of the Cocoa Marketing Company to promote investment and reforms within Africa’s cocoa industry.
Source: Wesleyannews.com
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