Cocoa Sector Debt and Legacy Contracts Cost Ghana Nearly $1bn
Director of Presidential Initiatives in Agriculture and Agribusiness at the Office of the President, Dr. Peter Boamah Otokunor has disclosed that Ghana incurred an estimated $941 million loss linked to legacy cocoa contracts, intensifying financial pressure on the country’s cocoa regulator and contributing to delayed payments to farmers.
Dr. Otokunor said the loss arose from a pricing mismatch between cocoa purchased from farmers and earlier international contracts that had to be honoured.
According to him, cocoa beans were purchased locally at significantly higher prices while the same volumes were used to fulfil older export contracts priced far below prevailing market rates.
“You are buying cocoa at $7,200 from the cocoa farmer per tonne, then you go and use it to pay a $2,600 per tonne contract. You can imagine the loss. When you do the estimations, we are losing almost about $941 million from that trade alone,” Dr. Otokunor told JoyNews.
The development has deepened the liquidity constraints facing the Ghana Cocoa Board, which oversees the purchase and marketing of the country’s cocoa beans.
Dr. Otokunor explained that approximately 240,000 metric tonnes of cocoa were allocated to settle rollover contracts inherited from the previous administration, with the remaining volumes sold on the international market under less favourable pricing conditions.
The contracts, he noted, effectively forced the regulator to deliver cocoa purchased at elevated domestic prices into legacy agreements signed at much lower rates.
Industry data indicates that COCOBOD entered the 2025/26 cocoa season carrying liabilities estimated at around GH¢60 billion.
These include GH¢17.8 billion in loans as well as GH¢26.5 billion in cocoa road contracts awarded between 2014 and 2024.
The situation has been compounded by the absence of syndicated financing for both the 2024/25 and 2025/26 cocoa seasons – a departure from the long-standing financing arrangement that for more than three decades provided upfront capital to Licensed Buying Companies to purchase cocoa from farmers during the harvest period.
Without this financing structure, the financial strain created by the rollover contracts has left the regulator struggling to maintain liquidity across the cocoa supply chain.
The funding challenges have had a direct impact on cocoa farmers, many of whom have reported delays in receiving payments for beans supplied since November 2025, particularly in major cocoa-growing areas such as the Western Region.
The government has since intensified engagement with farmers to explain the financial pressures affecting the sector and outline steps being taken to stabilise operations.
Ghana’s cocoa industry remains one of the country’s most strategic export sectors, supporting roughly 800,000 farming households across 10 regions and generating about $2 billion annually in foreign exchange earnings.
Dr. Otokunor said the administration of President John Dramani Mahama is working to address the liquidity challenges confronting the sector while pursuing reforms aimed at strengthening financial sustainability within the cocoa value chain.
He added that restoring stability to the cocoa sector remains a priority, given its central role in rural livelihoods and Ghana’s broader export economy.
