Ghana’s Producer Buying Company Debts Reach GHS 673 Million
State cocoa buyer faces asset seizure as banks pursue GHS 257 million in overdue payments and farmers remain unpaid for cocoa deliveries.
Abena Owusu | StatsGH |
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This crisis follows a government pledge in February to restore PBC as the leading cocoa buying company. Finance Minister Dr. Cassiel Ato Forson had emphasized this move was crucial for supporting cocoa farmers. However, three months later, PBC lacks the necessary funds to resume purchases. This financial distress at PBC highlights broader issues within Ghana’s cocoa sector. The industry already faces challenges from low global cocoa prices and weaker demand from chocolate manufacturers. PBC's problems also expose gaps between policy promises and the operational realities of cocoa financing.
PBC's financial woes extend beyond farmer arrears, according to a Reuters report. Liabilities include over 24 months of unpaid staff salaries and outstanding payments to vendors. There are also significant statutory payment arrears. PBC once handled about 30% of Ghana's domestic cocoa purchases, but now buys less than 5% of national output. This decline in market share severely impacts its revenue. This also limits its ability to support farmers in remote areas where private buyers have little commercial incentive to operate.
Under Ghana’s cocoa marketing system, licensed buying companies purchase cocoa from farmers. They then sell these beans to the Ghana Cocoa Board (COCOBOD). COCOBOD then sells the cocoa to international buyers. A company source indicated that COCOBOD has not reimbursed PBC for 800 metric tonnes of cocoa delivered more than two months ago. Neither the Finance Ministry nor COCOBOD has responded to PBC’s requests for financial assistance. This lack of support further compounds PBC’s liquidity problems. The state pension fund, SSNIT, which is a major shareholder, has been unwilling to inject new capital. SSNIT has not received expected dividends from its investment in PBC.
The immediate risk is that unpaid arrears will worsen hardship among cocoa farmers. This also undermines confidence in the licensed buying arrangements. The broader policy risk is that Ghana’s crucial cocoa sector continues to face financial instability. This occurs at a time when the country aims to stabilize production and rebuild trust in state-led commodity management. Resolving PBC's debt and operational issues is critical. This could prevent further destabilization of farmer incomes and broader sector performance. Policymakers must consider a structured intervention. This could include directing international buyer demand towards PBC and releasing funds for cocoa purchases, addressing governance issues and ensuring overdue payments are settled.