COCOBOD Commences Payment of Over GH¢6 Billion to Licensed Buying Companies to Clear Farmer Arrears

The Ghana Cocoa Board (COCOBOD) has initiated the disbursement of significant funds to Licensed Buying Companies (LBCs) to address the mounting arrears owed to cocoa farmers across the country. This strategic move is intended to resolve long-standing payment delays that have left many farmers without compensation for beans delivered over several months. By channeling these funds through LBCs, COCOBOD aims to restore liquidity within the cocoa supply chain and ensure that the backbone of Ghana’s agricultural sector—the cocoa farmer—receives their rightful earnings.

The intervention comes amid intense pressure from the Minority in Parliament, who recently spotlighted the financial crisis within the sector. According to parliamentary representatives, COCOBOD’s outstanding obligations to LBCs exceeded GH¢10 billion, a deficit that severely hampered the companies' ability to pay farmers on time. COCOBOD has acknowledged these challenges, attributing the delays to difficulties in securing traditional financing. To navigate these hurdles, the Board has had to rely on alternative funding arrangements with international cocoa buyers to bridge the cash flow gap.

Recent financial data indicates that substantial progress is being made in settling these debts. COCOBOD reported disbursements totaling more than GH¢6 billion between November and January, followed by an additional payment of over GH¢620 million in the current month. These payments are part of a broader effort to stabilize the industry and mitigate the economic hardship faced by farmers. The Board emphasized that these funds are specifically earmarked for clearing debts associated with delivered cocoa beans, which is critical for maintaining farmer trust and production levels.

Looking forward, COCOBOD is focused on moving away from the volatile financing cycles that led to the current arrears. The organization has expressed a commitment to establishing a more sustainable and robust financing model to prevent future payment bottlenecks. By securing more reliable funding streams, the Board hopes to ensure the long-term sustainability of the cocoa sector, which remains a vital pillar of Ghana’s national economy and a primary source of foreign exchange earnings.