Ghana is turning to its own capital markets to raise $1.4 billion for its cocoa industry, as the country seeks to secure funding for the next harvest season and address outstanding payments to cocoa buyers.
The Ghana Cocoa Board (COCOBOD) will raise the funds from domestic investors through a new financing programme designed to fund cocoa purchases for the 2026/27 season and restructure some of its existing debt.
It’s a shift from the country’s traditional reliance on international bank loans and financing from global cocoa traders, arrangements that have become increasingly difficult to sustain.
Under the plan, Cocoa Capital PLC, a wholly owned subsidiary of COCOBOD, will raise funds through commercial paper and bonds. The programme includes GH¢14 billion ($1.20 billion) in commercial paper to finance cocoa purchases and GH¢2.3 billion ($197.7 million) in bonds to help restructure existing debt.
The commercial paper will have maturities of up to 270 days, while the bonds will run for up to five years. Repayments will be backed by proceeds from selected cocoa export contracts.
Funding pressure weighs on cocoa industry
The financing plan comes at a difficult time for Ghana’s cocoa sector, which has struggled with funding gaps following the collapse of its decade-old syndicated loan arrangement with international banks during the 2023/24 season.
A separate arrangement that allowed international trading houses to provide financing for cocoa purchases also fell through last season, contributing to delays in payments to farmers.
Ghana’s licensed cocoa buyers say COCOBOD still owes them about GH¢4 billion ($343.9 million) for cocoa purchased during the previous season. They have called for the outstanding payments to be settled before the new crop year begins.
The delays have added to uncertainty for farmers and buyers, with the start date for Ghana’s new cocoa season yet to be announced.
Domestic capital markets take centre stage
The new programme is expected to draw participation from commercial banks, pension funds, insurance companies, stockbrokers, institutional investors and international cocoa buyers.
The plan offers a way to mobilise local savings to support one of its most important export industries, while reducing dependence on external financing arrangements.
COCOBOD has described the initiative as an effort to establish a more sustainable financing framework for the cocoa sector. The government has also outlined reforms aimed at improving the board’s financial position and strengthening the industry.
However, the immediate challenge remains ensuring that sufficient funds are available to purchase cocoa when the new season begins, while addressing the outstanding payments that have weighed on farmers and buyers.