Ghana’s licensed cocoa buyers owe banks between $650m and $750m, the Licensed Cocoa Buyers Association of Ghana said, leaving the financial sector short of cash for bean purchases amid ongoing economic strain.
The cocoa sector, where Ghana is the world’s second-largest producer, has faced two consecutive poor harvests due to crop disease and adverse weather. Global cocoa prices have also collapsed, leaving an oversupply in Ghana and neighbouring Ivory Coast, which together account for half of the world’s cocoa production. London cocoa futures fell to near a three-year low on Tuesday.
Debts piling up
Samuel Adimado, president of the Licensed Cocoa Buyers Association of Ghana, said the debt accumulation stems partly from Cocobod, the country’s cocoa regulator, spending more on non-core activities such as road construction. Buyers have taken out loans from banks to prefinance bean purchases.
“In all, buyers owe banks around 7 billion to 8 billion cedis ($650m to $750m), and 2.2 billion to 2.5 billion cedis to farmers. Interest keeps piling up,” Adimado told Reuters.
This season, cocoa buyers delivered around 580,000 metric tonnes to Cocobod but are still awaiting payment, while about 70,000 metric tonnes remain in the field. The government recently reduced the fixed producer price for around 100,000 metric tonnes and announced plans for a cocoa financing scheme to provide additional liquidity. Cocobod said it is working with the government to address its finances.
Banking system under strain
The Ghana Association of Banks (GAB) confirmed lenders across the cocoa sector are exposed to these debts. Association CEO John Awuah declined to provide a total but said the rising figures have forced some loan restructurings and could result in losses.
Ghanaian banks are still recovering from the 2023 Domestic Debt Exchange Programme, which restructured nearly all domestic bonds and affected banks’ capital cushions. Cocobod’s short-term cocoa bills, used to finance annual bean purchases, were converted into longer-dated bonds at lower coupon rates.
"The system appears to be resilient, but requires careful management to remain in compliance with Ghana's International Monetary Fund programme," Awuah said.
