Ghana Cocoa Board (COCOBOD) will implement a new funding model for the 2026/2027 cocoa season. This marks a major shift from its three-decade reliance on syndicated loans for crop financing. The new approach aims to ensure price stability for farmers and achieve sustainable income.
The new model will introduce a new pricing mechanism with periodic reviews, possibly quarterly. It will apply to the entire cocoa crop. Dr. Ransford Abbey, COCOBOD's Chief Executive, explained that this change seeks to balance income stability for farmers with the cocoa sector's financial health. It also aims to broaden participation for local processors and Ghanaian companies, keeping more value within the country.
Ghana's cocoa sector has historically depended on syndicated loans. These loans were backed by forward sales of cocoa. This model, while providing liquidity, required between 70% and 92% of the cocoa crop to be collateralized to offshore financiers. The new funding model instead focuses on mobilising capital through financial instruments like commercial paper and commercial notes. It will also tap into domestic liquidity, including investments from institutional investors.
Dr. Ransford Abbey disclosed these plans during a panel discussion at the Africa Cocoa Finance & Investment Forum (ACFIF 2026). The event took place at the London Stock Exchange on May 8, 2026. He highlighted the urgent need for a policy shift, moving away from the old syndicated loan system. He expressed confidence in Ghana’s financial ecosystem to support this transition.
The proposed reform will maintain the policy of paying farmers 70 per cent of the Free-On-Board (FOB) price. However, it will introduce periodic price reviews to respond to movements in global cocoa prices and exchange rates. A detailed prospectus outlining participation opportunities for financial institutions and investors is being prepared. This document will be shared with stakeholders before the 2026/2027 crop season begins.
This strategic pivot aligns with Ghana's broader economic goals of strengthening local financial markets. The government aims to reduce external borrowing and boost domestic investment. The move is also critical for the long-term sustainability of the cocoa industry. Cocoa remains a key contributor to Ghana's Gross Domestic Product (GDP) and foreign exchange earnings. Ghana is the world's second-largest cocoa producer.
COCOBOD acknowledges the need for clarity for all stakeholders. This includes Licensed Buying Companies (LBCs) and the investor community. Dr. Abbey expressed optimism that this new model will better protect the incomes of Ghanaian cocoa farmers. This protection will shield them from the volatility of global cocoa prices. The ACFIF 2026 forum, where these announcements were made, brought together policymakers, investors, and industry stakeholders. They sought to advance reforms and unlock investment across Africa's cocoa sector.