By Eugene Davis
Ghana’s cocoa sector is facing mounting liquidity pressures after delayed payments by the Ghana Cocoa Board (COCOBOD) left farmers unpaid for months and strained the finances of Licensed Buying Companies (LBCs), the Minority in Parliament has said, warning that the situation risks undermining output, rural incomes and export earnings.
Addressing a press conference, Isaac Yaw Opoku, Ranking Member on Parliament’s Food, Agriculture and Cocoa Affairs Committee, said cocoa farmers have not been paid for beans delivered since November 2025, describing the delays as evidence of “serious cash flow and financial management challenges” at the state regulator.
“Farmers depend almost entirely on cocoa for their livelihoods. When payments are delayed for months, the impact is immediate — households struggle to meet basic needs and cannot reinvest in their farms,” he said.
According to the Minority, many farmers are being forced to sell at discounts or on credit, while others return home with unsold produce — conditions that threaten the sustainability of production in the world’s second-largest cocoa producer.
At the centre of the problem, the caucus argues, is COCOBOD’s failure to reimburse buying firms for cocoa already delivered. It estimates that more than GH¢10bn is owed to LBCs, effectively locking up working capital and preventing them from continuing purchases in the field.
The result has been what the Ranking Member described as a “freeze” across the supply chain.
“Once LBCs are not reimbursed, they cannot borrow or return to buy. The entire system stalls,” he said, calling for the immediate settlement of arrears and prompt repayment of cocoa taken-over receipts to restore confidence.
The Minority disputed recent assurances by COCOBOD that sufficient funds had been released to support purchases, arguing that the continued non-payment of farmers suggests otherwise. It also rejected claims that Ghana’s long-standing syndicated loan facility for cocoa purchases had been constrained by past defaults, insisting the country has maintained its repayment record since the scheme began in the early 1990s.
While acknowledging the recent fall in global cocoa prices, the caucus argued that cyclical price movements should have been mitigated through prudent hedging and forward sales.
Under previous administrations, roughly 70 per cent of projected output was sold forward to lock in prices and secure pre-financing ahead of the crop season. The Minority said forward sales have been reduced to about 30 per cent this season, leaving COCOBOD more exposed to spot-market volatility and tightening liquidity when prices softened.
“This weakened the board’s ability to project revenues and pay farmers on time,” Mr Opoku said.
Beyond the immediate payment delays, the caucus warned of broader macroeconomic risks. Cocoa remains one of Ghana’s largest sources of foreign exchange and supports hundreds of thousands of rural households. Prolonged disruptions could curb farm investment, reduce yields and encourage cross-border smuggling, ultimately shrinking export receipts and pressuring the cedi.
Local buying firms and transport operators are also under strain. Many pre-finance purchases with bank loans and trade credit. Without timely reimbursement from COCOBOD, debt burdens are rising, raising the prospect of defaults among indigenous operators.
The payment backlog comes as Ghana experiments with changes to its long-standing cocoa financing model. Under the traditional system, COCOBOD raised annual syndicated loans to fund purchases. More recently, international traders have been expected to shoulder a greater share of the upfront financing, a shift that market participants say has proved challenging amid volatile prices and tighter global liquidity.
Cocoa prices, which surged sharply in 2024, have since retreated, falling about 20 per cent this year after last year’s steep correction. Analysts say the reversal has complicated revenue projections and cash planning for producer countries.
Separately, COCOBOD’s chief executive, Dr Ransford Abbey, told Parliament’s committee that Ghana must keep its pricing competitive to attract international buyers under the new structure, noting that “for the buyers to come back and fund the cocoa crops, our price has to be competitive”.
The Minority, however, maintains that governance and operational issues — including what it describes as internal management tensions and rising administrative costs — have compounded the funding squeeze.
Producer prices are also under scrutiny. Despite earlier political commitments to raise farmgate payments, the current price stands at GH¢3,625 per 64kg bag.
“Prompt payment is not discretionary,” Mr Opoku said. “It is fundamental to sustaining production and protecting livelihoods.”
The caucus is demanding immediate payments to farmers, the clearance of all outstanding arrears owed to buying companies, and reforms to restore stability to the purchasing and financing system.
For many growers, the issue is less about policy design than cash in hand. As one industry observer noted, delays at the peak of the season risk weakening trust in a sector that remains central to Ghana’s rural economy and export base.
