IFC Injects $300m to Ease Financing Pressures in Ghana’s Cocoa Sector
The International Finance Corporation (IFC) says it has intervened in Ghana’s cocoa industry to address a significant funding shortfall that threatened to disrupt the cocoa supply chain, committing hundreds of millions of dollars to support licensed buying companies (LBCs) and cocoa farmers.
In an interview on Channel One TV’s The Point of View, IFC Senior Country Manager Kyle Kelhofer said delays in anticipated financing arrangements by the Ghana Cocoa Board (COCOBOD) had intensified pressure on LBCs, leaving many to fund their operations independently in an already difficult market environment.
He explained that the financing gap, which has persisted for roughly the past 18 months, has tightened liquidity throughout the cocoa value chain, increasing operational risks for industry participants.
“The key challenge we have been addressing over the last year and a half is the financing gap at COCOBOD, which has meant that the LBC supply chain has had to rely on self-financing,” Kelhofer noted.
Ghana, which ranks as the world’s second-largest producer of cocoa beans, depends on an interconnected financing framework to move cocoa from farms to export destinations. Disruptions to this mechanism, together with production-related setbacks, have amplified liquidity pressures across the sector.
To cushion the impact, the IFC said it has partnered with local banks, regulators, the Bank of Ghana and the Ministry of Finance to provide funding in local currency to sustain cocoa purchasing and distribution activities.
“With backing from the regulators, the central bank and the Ministry of Finance, we have stepped in to ensure that LBCs can access adequate local currency liquidity through domestic banks,” he explained.
Kelhofer disclosed that the IFC has already disbursed more than $100 million to the cocoa sector, with total support likely to reach up to $300 million this year. He said the financing is intended to keep the supply chain operational and promote competitive pricing for farmers at the farm gate.
“So far, we have committed over $100 million and could reach as much as $300 million this year, to ensure the cocoa supply chain remains functional and that farmers continue to benefit from competition among LBCs and improved returns,” he added.
The intervention reflects the expanding role of development finance institutions in shoring up strategically important industries, as Ghana’s cocoa sector contends with funding challenges, production uncertainties and wider market pressures.
