Ghana plans to raise GHS 14.5 billion ($1 billion) through domestic bonds to finance cocoa purchases from farmers ahead of the 2026/2027 crop season. This significant shift aims to overhaul how the country funds its cocoa sector.
The proposed bond issuance is expected before the new cocoa season begins around August 2026. This move comes as Ghana, the world's second-largest cocoa producer, faces severe market volatility and funding pressures. The change follows a sharp decline in cocoa prices after an historic rally in 2024. The bond will be denominated in Ghana’s local currency, the cedi.
For over three decades, COCOBOD's financing model relied on syndicated pre-export facilities, typically ranging from $1 billion to $1.5 billion annually. These loans were backed by cocoa receivables and repaid within 7–12 months from export proceeds. This model saw borrowing costs increase significantly, from roughly 1.5% in 2016/17 to about 8% in dollars by 2023/24. Rising global interest rates and a deteriorated sovereign risk profile for Ghana contributed to these higher costs.
In 2024/25, authorities partially shifted to local funding after failing to secure a $1.5 billion offshore loan. Ghana National Petroleum Corporation (GNPC) provided a short-term bridging finance of GHS 800 million for cocoa purchases last year. Cocoa production also fluctuated, peaking at 1,040,000 metric tonnes in 2020/21, then falling to 531,000 metric tonnes in 2023/24. Estimates for 2024/25 are around 700,000 metric tonnes.
Randy Abbey, Chief Executive of the Ghana Cocoa Board (COCOBOD), confirmed the strategic shift. Speaking at the Africa Cocoa Investment Forum in London, he stated Ghana aims to reduce its dependence on dollar funding and foreign lenders. Abbey noted that current interest rates in Ghana are favorable for entering the domestic market.
The syndicated loan model, once predictable, became more expensive and harder to secure. Ghana's cocoa sector still largely relies on its 762,000 smallholder farmers, producing 15-25% of global supply. Ghana is the world's second-largest cocoa producer after Côte d'Ivoire. Cocoa has been a backbone of the economy, providing approximately $2 billion in annual foreign exchange until recently.
This move is crucial for COCOBOD, which regulates the cocoa industry, setting producer prices and managing cocoa aggregation. High financing costs combined with volatile production have strained COCOBOD’s cash flows. This new domestic funding strategy aims to stabilize the cocoa sector’s financial health and ensure timely payments to farmers.
The successful issuance of this bond will indicate market confidence in Ghana's domestic debt market. It will also test the government's ability to manage its financial obligations locally. Investors will watch for signs of how well this new model supports cocoa production and export earnings. This strategy could set a precedent for financing other key agricultural sectors in Ghana.