The government is set to raise a $1 billion bond in Ghana cedis to finance cocoa purchases for the 2026/2027 crop season as authorities move to address persistent funding and production challenges within the cocoa sector.
The planned bond issuance, expected before August this year, is aimed at reducing Ghana’s dependence on foreign banks for cocoa financing while ensuring that adequate funds are available to purchase cocoa beans from farmers ahead of the next crop season.
The move comes at a time when Ghana’s cocoa industry has been battling several setbacks over the past two years, including declining production levels, irregular weather conditions, cocoa-related diseases, and the growing impact of illegal mining, popularly known as galamsey.
Analysts say many cocoa farmers have abandoned their farms for illegal mining activities due to delayed payments, lower returns from cocoa farming, and uncertainty within the sector.
The industry has also faced declining global demand as some international chocolate manufacturers increasingly turn to synthetic cocoa alternatives amid supply challenges and rising costs.
Another major setback to the sector has been the impact of Ghana’s Domestic Debt Exchange Programme, which affected access to financing after some investors suffered losses through haircuts. This has made it more difficult for the government and COCOBOD to secure the required funding to support cocoa purchases and operations.
Despite these challenges, industry observers say production levels are gradually improving as the government introduces measures to stimulate output and stabilize the sector.
Reports indicate that although the $1 billion bond will be equivalent to about one billion dollars, it will be denominated in Ghana cedis. Authorities believe raising the funds locally could reduce exchange rate risks and lower the country’s dependence on dollar-denominated borrowing.
While borrowing externally often comes with high repayment costs, especially when the cedi weakens against the dollar, with the cedi showing relative stability in recent months, the government believes raising funds locally could provide a more sustainable financing model while helping secure enough resources to purchase cocoa beans on time for the next crop season.
