The Ghana Cocoa Board (COCOBOD) has announced that it is finalising a new funding model set to take effect from the 2026/2027 crop season. The new funding model promises greater income stability for farmers, reduced dependence on offshore financiers, and a stronger role for domestic capital markets.

Speaking at the Africa Cocoa Finance and Investment Forum 2026 held at the London Stock Exchange, the Chief Executive Officer for COCOBOD, Dr Randy Abbey, stated that for more than 30 years, COCOBOD has relied on syndicated loans backed by forward cocoa sales to finance the purchase of Ghana’s annual cocoa harvest.

He explained that although the arrangement has kept the sector liquid, it has come at a steep cost: between 70 and 92 per cent of Ghana’s cocoa crop has routinely been pledged as collateral to offshore lenders — leaving little room for the country to capture greater value from its own most prized agricultural export.

COCOBOD Chief Executive Dr Randy Abbey described this dependency as unsustainable. “While effective in providing liquidity, it also required between 70 per cent and 92 per cent of the cocoa crop to be collateralised to offshore financiers, underscoring the urgent need for a paradigm shift in policy,” he said.

What the New Model Will Look Like

The proposed framework marks a structural break from the old approach in several important ways.

Rather than locking in a single producer price at the start of each crop season, the new model will introduce a dynamic pricing mechanism featuring periodic reviews — likely on a quarterly basis — to ensure farmgate prices better reflect real-time movements in global cocoa markets and exchange rates. This is designed to shield farmers from being locked into low prices when global values rise mid-season.

Crucially, COCOBOD’s policy of paying farmers 70 per cent of the Free-On-Board (FOB) price will be retained, providing a measure of income certainty even as the pricing structure becomes more flexible.

On the financing side, the new model will tap into domestic liquidity by raising capital through instruments such as commercial paper and commercial notes, with institutional investors — including pension funds and local financial institutions — expected to play a more prominent role. This pivot toward home-grown financing is intended to reduce Ghana’s exposure to offshore debt obligations and keep more of the economic benefit of cocoa within the country.

Dr Abbey framed the reform as more than just a financing fix. He said it would widen participation in Ghana’s cocoa economy by improving financing access for local processors and indigenous Ghanaian companies — sectors that have historically struggled to compete with large multinational buyers for credit and market access.

The overarching goal, he said, was “to strike a careful balance between income stability for farmers and the financial sustainability of the cocoa sector”.

Stakeholder Concerns and the Road Ahead

The proposed changes have not been without scrutiny. Licensed Buying Companies and investors have raised questions about the structure and scale of the new financing arrangements — concerns Dr Abbey said COCOBOD is taking seriously.

He confirmed that a detailed prospectus outlining participation opportunities in the new model is being finalised and will be made fully available to stakeholders before the 2026/2027 crop season begins. He also expressed confidence in Ghana’s improving macroeconomic environment and growing investor appetite for structured financial instruments as key enablers of a smooth transition.

The forum, hosted at the London Stock Exchange, was organised by Cocoa Trade and Invest Africa in partnership with the International Cocoa Organisation and the UK office of the Cocoa Marketing Company, as part of a broader push to drive reform and attract investment across Africa’s cocoa sector.

By: Janice Opoku-Agyemang