The Ghana Cocoa Board has announced that it is in the process of finalizing a new funding model for the cocoa sector, which is set to be implemented in the 2026/2027 crop season. This initiative is part of efforts aimed at ensuring price stability and sustainable incomes for cocoa farmers.
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, the Chief Executive of COCOBOD, Dr. Randy Abbey, made this disclosure.
Dr. Abbey indicated that for over thirty years, Ghana’s cocoa sector has depended on syndicated loans that are secured by forward cocoa sales to finance its annual crop purchases.
He noted that while this arrangement has facilitated liquidity for cocoa purchases over the years, it has also necessitated that a substantial portion of Ghana’s cocoa output be tied to offshore financiers.
“Although effective in providing liquidity, it has required between 70 percent and 92 percent of the cocoa crop to be collateralized to offshore financiers, highlighting the urgent need for a shift in policy,” he stated.
He elaborated that the new funding framework would introduce a revised pricing mechanism that would involve periodic reviews, potentially on a quarterly basis, to establish producer prices throughout the crop season.
“The new funding model will incorporate a new pricing mechanism that will entail periodic reviews, possibly quarterly, and will be applicable for the entire crop,” Dr. Abbey remarked.
He mentioned that the proposed model would mobilize capital through instruments such as commercial paper and commercial notes, while also leveraging domestic liquidity, including support from institutional investors.
Dr. Abbey emphasized that the reform would uphold the policy of compensating cocoa farmers with 70 percent of the Free-On-Board (FOB) price, while permitting periodic price adjustments to reflect fluctuations in global cocoa prices and exchange rates.
He concluded by stating that the goal is “to achieve a careful balance between income stability for farmers and the financial sustainability of the cocoa sector.”
He stated that the model would expand involvement in the cocoa economy, enhance access to financing for local processors and indigenous Ghanaian enterprises, and boost value retention within the nation.
Dr. Abbey conveyed his confidence in Ghana’s financial sector to facilitate the transition, referencing improving macroeconomic conditions and a growing interest from investors in structured financial instruments.
He recognized the concerns of stakeholders, especially Licensed Buying Companies and investors, regarding the framework and scale of the proposed financing arrangements.
He mentioned that a comprehensive prospectus detailing participation opportunities was being finalized and would be thoroughly explained prior to the commencement of the 2026/2027 crop season.
He indicated that the reforms would provide better protection for farmers against the impacts of global cocoa price fluctuations.
The forum was organized by Cocoa Trade and Invest Africa in collaboration with the International Cocoa Organization and the United Kingdom office of the Cocoa Marketing Company to advocate for reforms and investment in Africa’s cocoa sector.
