The Minister for Finance, Dr. Cassiel Ato Forson, has announced a comprehensive reform package aimed at correcting what he describes as years of “gross mismanagement” in Ghana’s cocoa sector.
Speaking at the Ministry of Finance on Thursday, February 12, Dr. Forson said a detailed review of the industry over the past eight years revealed deep structural and financial challenges that require urgent intervention. He noted that Cabinet has approved sweeping measures to stabilise the sector, guarantee fair returns for farmers, and ensure long-term sustainability.
“A careful assessment of the cocoa sector over the last eight years revealed significant mismanagement that demands immediate and far-reaching reforms,” the Minister stated.
The approved reforms include:
1. Immediate settlement of farmer arrears
Cabinet has directed the Ghana Cocoa Board (COCOBOD) to begin paying all outstanding amounts owed to cocoa farmers due to delayed payments.
2. Automatic producer price adjustment mechanism
A new COCOBOD Bill will be submitted to Parliament to introduce an automatic system for adjusting producer prices. Prices will reflect changes in global market trends, exchange rates, and other key economic indicators.
3. Guaranteed minimum of 70% of gross FOB price
The proposed legislation will ensure that cocoa farmers receive no less than 70% of the gross Free-On-Board (FOB) price, strengthening income security for producers.
4. New financing framework from 2026/2027 crop season
The current buyer-dependent financing structure, which replaced the syndicated loan model, will be discontinued. Government plans to introduce a more sustainable financing arrangement beginning with the 2026/2027 crop season.
5. Issuance of domestic cocoa bonds
Under the new model, domestic cocoa bonds will be issued to finance cocoa purchases. The bonds will be repaid within each crop year, creating a revolving fund to support COCOBOD’s operations.
6. Revival of indigenous Licensed Buying Companies (LBCs)
The restructuring is also expected to restore the participation of indigenous Licensed Buying Companies, many of which exited the market under the existing financing system.
Dr. Forson emphasised that the reforms are designed to rebuild confidence in the cocoa sector, strengthen financial discipline, and prioritise the welfare of Ghanaian cocoa farmers.
