The Minister of Finance, Dr Cassiel Ato Forson, has announced a series of comprehensive reforms aimed at salvaging Ghana’s cocoa sector.
Following a review of the industry over the past eight years, the minister cited gross mismanagement as the catalyst for an immediate strategic shift.
According to Dr Forson, Cabinet has approved these measures to secure fair pricing for farmers, restore the sector’s financial viability, and ensure long-term industrial sustainability.
In a move to provide instant stability, Cabinet has directed COCOBOD to commence the immediate payment of all outstanding debts owed to cocoa farmers.
To prevent future payment delays, a new COCOBOD Bill will be presented to Parliament.
This legislation introduces an automatic price adjustment mechanism that aligns producer prices with fluctuations in the world market price, currency exchange rates, and other key economic variables. Crucially, the bill will guarantee that cocoa farmers receive a minimum of 70% of the gross FOB price.
The minister detailed a transition away from the current financing model, which was adopted out of necessity after the 32-year-old syndicated loan system failed. Dr Forson noted that the current model, which relies on buyers to pre-finance purchases, is no longer sustainable.
He explained that the buyer’s willingness to pre-finance was previously motivated by rollover contracts priced significantly lower than market value, but as the gap between these contracts and market prices closes, this model will lose its viability.
The Ministry also criticised the previous syndicated loan model, noting that it forced COCOBOD to sell forward raw beans as collateral, which prevented Ghana from optimising market prices or utilising its domestic processing capacity.
In response, the government will now pivot to a domestic cocoa bond system. This model will utilise domestic bonds to raise a revolving fund for COCOBOD to use within each crop year, with the debt being repaid directly by cocoa proceeds.
This new direction aims to revive indigenous licensed buying companies that were previously sidelined by the old financing structure.
Specifically, the state-owned Produce Buying Company will be restructured to resume full operations and reclaim its position as the leading Licensed Buying Company in the sector.
A primary objective of this overhaul is to prioritise value addition and job creation.
By decoupling sales from loan collateral requirements, COCOBOD will now have the flexibility to sell beans of any volume to local processing companies.
To jumpstart this initiative, Cabinet has directed that the remainder of the beans for the 2025/26 crop season be allocated entirely for domestic processing.
By: Rainbowradioonline.com/Ghana
