Ghana’s Cocoa Sector Faces Funding Crisis as COCOBOD Owes Buyers Over $185 Million

The Licensed Cocoa Buyers Association (LBCs) has raised an alarm over a deepening financial crisis in Ghana’s cocoa sector, revealing that the Ghana Cocoa Board (COCOBOD) owes its members approximately $185 million in arrears for the last two seasons. Samuel Adimado, President of the Association, disclosed that total debts owed to LBCs range between GH¢10 billion and GH¢11 billion. This massive backlog has created a liquidity crunch that is trickling down to the very foundation of the industry, leaving farmers without payment for months and straining the relationship between buyers and producers. The crisis has reached a point where some LBCs owe more to commercial banks than they do to the farmers they source from.

For the past seven years, LBCs have sustained the cocoa trade by pre-financing purchases through high-interest loans from commercial banks. However, delayed reimbursements from COCOBOD, which sometimes take up to nine months, have left many LBCs in a precarious position. Adimado clarified that the public perception—and the growing anger among farmers—that LBCs are intentionally withholding funds is inaccurate. Instead, the buyers are caught in a cycle of debt, waiting for the regulator to release funds to settle both their mounting bank obligations and outstanding payments to the farmers who operate on a trust-based system with purchasing clerks.

A significant driver of this instability is a shift in the industry's funding structure. The traditional syndicated loan model, which historically provided more predictable liquidity, has transitioned toward a trader-based system. Under this new arrangement, LBCs do not receive upfront funding from COCOBOD but instead depend on external traders. This structural change has exacerbated payment delays, as the timing of funds often fails to align with the peak harvest periods when cash is most needed on the ground. Consequently, even when the government announces increases in producer prices—such as the recent hike to GH¢3,625 per bag—farmers remain unable to access the cash value of their labor.

The human cost of these systemic failures is particularly evident in regions like Kadjebi and the Jasikan Municipality, where farmers report significant financial hardship. Many have delivered their beans months ago without receiving compensation, leading to a breakdown in the traditional trust between farmers and purchasing clerks. This frustration has birthed accusations that LBCs are effectively "stealing" the cocoa, a sentiment that Adimado warns is driving farmers away and could compromise the integrity of the entire supply chain. The lack of immediate payment is creating a ripple effect of poverty across rural communities that rely almost exclusively on cocoa revenue.

In response to the escalating tension, the Licensed Cocoa Buyers Association is seeking urgent intervention from the Ministry of Finance to resolve the payment deadlock. While Adimado emphasized that the association is not in direct conflict with COCOBOD, he stressed the need for a collaborative resolution to stabilize the cocoa economy. The goal of ongoing discussions is to establish a more sustainable funding mechanism that ensures prompt payments to farmers and protects the livelihoods of all stakeholders in Ghana’s vital cocoa industry.