Modalities for a new cocoa sector funding model are nearing completion ahead of its implementation in the 2026/2027 crop season.
Dr. Ransford Abbey, Chief Executive-Ghana Cocoa Board (COCOBOD), says the new model marks a major shift in Ghana’s cocoa financing strategy and seeks to ensure price stability and sustainable farmer income.
This was disclosed at a high-level panel discussion on Pre-Export Liquidity & Long-Term Capital at the Africa Cocoa Finance & Investment Forum (ACFIF 2026), held at the London Stock Exchange.
The country’s cocoa sector has for over three decades relied on syndicated loans, backed by forward cocoa sales to finance annual crop purchases.
Although the model ensured access to liquidity, it also required that between 70% and 92% of the cocoa crop be collateralised to offshore financiers – underscoring the urgent need for a paradigm-shift in policy.
“The new funding model will come with a new pricing mechanism that will involve periodic reviews – maybe quarterly – and will be used for the entire crop,” Dr. Abbey explained.
The model focuses on mobilising capital through instruments such as commercial paper and commercial notes while tapping into domestic liquidity, including institutional investors.
The proposed reform will maintain the policy of paying farmers 70 percent of the Free-On-Board (FOB) price, while introducing periodic price reviews that respond to movements in global cocoa prices and exchange rates.
The objective is to strike a careful balance between income stability for farmers and the cocoa sector’s financial sustainability. A detailed prospectus outlining participation opportunities for financial institutions and investors is being finalised and its contents will be fully explained to key stakeholders ahead of the 2026/2027 crop season opening.
Incomes of Ghanaian cocoa farmers will be better protected from global cocoa price volatility in the years ahead.
Dr. Abbey expressed confidence in Ghana’s financial sector’s ability to support the transition, citing improving macroeconomic conditions and increasing investor interest in structured financial instruments.
He acknowledged concerns among stakeholders, particularly Licenced Buying Companies and investors, regarding structure and scale of the proposed financing arrangements.
COCOBOD continues to supply free fertilisers, insecticides and sprayers to farmers.
thebftonline
