Ghana Cocoa Board (COCOBOD) successfully raised GHS 3.396 billion from domestic institutional investors. This funding came through the maiden commercial paper issuance of Cocoa Capital PLC, a wholly owned subsidiary of COCOBOD. The initiative marks a significant shift in COCOBOD's financing strategy, aiming to reduce its reliance on external borrowing for cocoa purchases.
This initial issuance is part of a broader GHS 16.3 billion Domestic Cocoa Notes Programme. This comprehensive program, managed by Cocoa Capital PLC, seeks to mobilise funds from Ghana's domestic capital market. The program includes GHS 14 billion designated for commercial paper to finance cocoa purchases. It also allocates GHS 2.3 billion for bonds intended to refinance existing debt within the cocoa sector.
Historically, Ghana's cocoa sector has depended heavily on offshore syndicated loans and government budget allocations for financing. This new domestic approach aims to create a more sustainable and robust funding framework. The shift aligns with broader national efforts to strengthen local financial markets and reduce exposure to international financial volatility. Ghana's economy, often influenced by commodity prices, benefits from such localised financial resilience.
Dr. Ransford Anertey Abbey, COCOBOD Chief Executive, highlighted the importance of this new financing model. He stated that cocoa purchases over the past three decades relied substantially on external borrowing. Dr. Abbey explained that the new model mobilises domestic liquidity and strengthens the relationship between Ghana's capital market and the vital cocoa sector. He also pledged financial discipline, transparency, and accountability in managing these funds.
The maiden issuance, known as Series 1 (Tranche 1), attracted strong interest from investors. It received bids totalling approximately GHS 3.586 billion from 38 institutional investors. COCOBOD accepted GHS 3.396 billion at a clearing yield of 11%. This strong investor confidence underscores the market's appetite for domestic investment opportunities. The issuance has been admitted to the Ghana Fixed Income Market (GFIM) of the Ghana Stock Exchange.
Proceeds from this first series will provide crucial working capital for cocoa purchases during the 2026/27 crop season. This ensures timely payments to cocoa farmers, whose incomes directly depend on the prompt sale of their produce. The initiative is designed to strengthen COCOBOD's financial foundations. It also ensures that the benefits of this financing arrangement directly reach the farmers, supporting their livelihoods and the broader agricultural economy.
This strategic move by COCOBOD could set a precedent for other state-owned enterprises seeking stable, local funding. It reduces foreign exchange risk associated with external debt, which can fluctuate with currency movements. A stronger domestic capital market also provides more avenues for Ghanaian institutions to invest their funds locally. This contributes to national economic growth and stability. The success of this program will be closely watched by financial analysts and policymakers.
COCOBOD's commitment to financial discipline and compliance with reporting requirements is crucial for the program's long-term success. This domestic financing framework offers a more predictable and controlled funding environment. It insulates the cocoa sector from some global economic shocks. The initiative represents a significant step towards financial self-reliance for one of Ghana's most critical economic pillars.