Pension funds, commercial banks and international cocoa buyers have been identified as the main sources of funding for COCOBOD’s proposed new financing model, according to the organisation’s Deputy Chief Executive for Finance and Administration, Ato Boateng.
The new arrangement, which is expected to be introduced before the 2026/2027 cocoa season, is designed to raise working capital through the issuance of commercial paper and reduce Ghana’s reliance on the syndicated loan system that has financed cocoa purchases for more than three decades.
Speaking on the sidelines of the Ghana UK Investment Summit in London, Mr Boateng said significant progress had been made towards implementing the new funding framework.
He said advisors engaged for the programme were finalising the financing structure and addressing regulatory requirements to ensure a successful launch.
“We have made significant progress and engaged all the necessary advisors to support the issuance process,” he said. “The advisors are working diligently to finalise the financing structure, which is now at an advanced stage, while addressing all regulatory requirements and concerns raised by the relevant authorities.”
Mr Boateng said pension funds had emerged as one of the most promising sources of capital for the initiative. Other options being considered include commercial banks and private placements involving international buyers and participants across the cocoa value chain.
He described the approach as an innovative financing solution aimed at strengthening the resilience and long term sustainability of Ghana’s cocoa sector.
“We need to be innovative in our approach because we also want commercial banks to play an active role,” he said. “To achieve this, we are exploring opportunities to bring Development Finance Institutions on board to enhance the lending capacity of participating banks.”
A key feature of the proposed framework is a tranche based structure that would allow COCOBOD to draw funds only when needed for cocoa purchases.
According to Mr Boateng, this would help reduce borrowing costs and improve the efficient use of resources.
“The objective is to structure the financing in tranches, enabling us to draw down only the funds required for cocoa purchases at any given time,” he said. “Once those funds are no longer needed, we can repay investors promptly, ensuring prudent utilisation of resources and minimising financing costs.”
The proposed model has received support from Finance Minister Dr Cassiel Ato Forson and Bank of Ghana Governor Dr Johnson Asiamah, who have both described it as a well structured and forward looking alternative to existing financing arrangements.
The reforms come at a crucial time for Ghana’s cocoa industry as concerns grow over producer prices, financing sustainability, productivity and the sector’s long term competitiveness.
Industry analysts believe the commercial paper programme could mark a significant shift in cocoa financing by increasing domestic participation, reducing dependence on external borrowing, strengthening local capital markets and supporting a more sustainable cocoa sector.
