The Ghana Cocoa Board (COCOBOD) has successfully raised GH¢3.39 billion, approximately US$288 million, through a short-term domestic debt issuance. This move aims to support cocoa purchases from farmers during the 2026/2027 crop season. The funds were secured via Cocoa Capital PLC, a special-purpose vehicle established by COCOBOD to mobilize financing for the cocoa sector. According to results of the debt issuance, the transaction attracted an interest rate of 11 per cent and is due to mature in June 2027.
Despite the successful issuance, the amount raised fell short of the GH¢4 billion target, leaving a difference of GH¢610 million. The funding is expected to provide liquidity for Licensed Buying Companies (LBCs), which purchase cocoa beans from farmers on behalf of COCOBOD. This development is particularly crucial as the new season gets underway, with buyers previously expressing concerns about financing purchases using their own resources while waiting for reimbursement.
Ghana's cocoa industry has faced persistent financing challenges and delays in payments to farmers. For decades, COCOBOD relied on syndicated loans from international banks to finance cocoa purchases. However, that arrangement collapsed during the 2023/2024 season, forcing the regulator to seek alternative sources of funding. A subsequent arrangement with international cocoa traders also broke down, contributing to delays in payments to farmers during the previous season.
The latest financing model marks a significant shift, relying on the domestic capital market rather than a single external borrowing arrangement or direct financing from international traders. The GH¢3.39 billion was raised through a formal debt issuance by Cocoa Capital PLC, with a defined interest rate and maturity date. This approach provides a planned financing pipeline rather than a one-off emergency arrangement.
The broader programme includes additional tranches, providing a structured financing plan. However, the first tranche raised is GH¢610 million below target, and the full programme still depends on COCOBOD's ability to attract investors, service its debt, and release funds quickly to LBCs. The debt issuance forms part of a broader GH¢16.3 billion domestic financing programme announced in September.
Under the programme, GH¢14 billion is earmarked for short-term financing of cocoa purchases during the 2026/2027 season, while GH¢2.3 billion is intended to help restructure existing COCOBOD debt through medium- to long-term bond issuances. This shift towards domestic financing represents a significant change in how the cocoa sector raises funds, with greater reliance on Ghana's own capital market.
The new approach could give COCOBOD greater control over the timing and structure of its borrowing, reducing its dependence on international banks and traders. According to GTV, the move may help mitigate risks associated with global market conditions or concerns about Ghana's creditworthiness. The successful issuance brings relief to farmers and LBCs, enabling them to proceed with cocoa purchases for the new season.
Key points
- COCOBOD raises GH¢3.39 billion for 2026/2027 cocoa purchases
- The amount raised falls short of the GH¢4 billion target
- The new financing model relies on Ghana's domestic capital market
