The Produce Buying Company (PBC) Limited faces complete bankruptcy according to auditors who analyzed the state owned enterprise’s 2024 financial statements, marking a catastrophic deterioration from an already critical situation just one year earlier.
Adom Boafo and Associates, the company’s independent auditors, issued a qualified opinion on financial statements for the year ended September 30, 2024, explicitly stating that their analysis indicates complete bankruptcy. This represents a dramatic escalation from 2023, when auditors warned of severe going concern challenges and complete reliance on loans for continuous operations.
The numbers tell a story of operational collapse. Revenue plummeted 95 percent from GHC 778.9 million in 2023 to just GHC 41.5 million in 2024, while losses more than doubled from GHC 34.1 million to GHC 69.9 million over the same period. The company’s core produce business, which generated GHC 742.3 million in 2023, fell to a mere GHC 10.1 million in 2024.
These results produced a net loss margin of negative 718.4 percent, underscoring what auditors described as the complete breakdown of the business model. Group total equity worsened from negative GHC 381.341 million in 2023 to negative GHC 441.327 million in 2024, deepening the company’s technical insolvency.
Working capital deficits expanded significantly across both years. At the company level, negative working capital grew from GHC 142.92 million in 2023 to GHC 208.72 million in 2024. The group working capital deficit increased from GHC 263.66 million to GHC 328.0 million, demonstrating a liquidity crisis that continues to intensify.
The current ratio, measuring the company’s ability to pay short term obligations, fell from 55.9 percent in 2023 to 46.2 percent in 2024. Both figures indicate insufficient current assets to cover current liabilities, but the downward trend signals accelerating distress.
Directors have maintained the same three conditions for the company’s survival since 2023: timely funding from Ghana Cocoa Board (COCOBOD), successful restructuring and asset disposal, and raising new equity capital. However, the 2024 statements show no visible progress toward fulfilling any of these requirements.
A material uncertainty regarding ownership of significant assets remains unresolved. Auditors reported they still have not sighted title deeds for sheds and buildings ceded by Ghana Cocoa Board, despite government assurances. This critical issue was first raised in the 2023 audit and persists without resolution.
The financial meltdown has triggered a cascade of legal and operational consequences. In January 2024, an Accra High Court ruled in favor of six commercial banks seeking to recover approximately GHC 495.4 million in outstanding debts. Justice Sheila Minta ordered the Agriculture Development Bank (ADB), Bank of Africa Ghana, CalBank PLC, GCB Bank PLC, Universal Merchant Bank (UMB), and United Bank for Africa (UBA) Ghana to identify and attach PBC’s immovable properties for potential sale.
Representatives of the creditor banks arrived at the company’s Dzorwulu headquarters on January 26, 2024, to execute the court ordered attachment notice. Information gathered during the exercise suggested that much of the indebtedness stemmed from COCOBOD’s activities rather than direct mismanagement by PBC.
Staff members staged protests in May 2024 after reports emerged that PBC owed COCOBOD GHC 280 million related to over 5,000 tons of undeclared cocoa stock from the 2022 to 2023 period. Workers also complained about unpaid salaries and pension contributions spanning six years and 10 months.
The company faces exposure to severe liquidity risk, currency risk from United States dollar denominated liabilities, operational risk, and compliance risk. It was previously delisted from the Ghana Stock Exchange for non compliance with financial reporting requirements. The internal control unit remains under resourced, and audit reports note that recommendations to mitigate risks have not been adequately implemented.
Long term debt stands at GHC 377.656 million for the group, including a substantial USD 10 million loan from COCOBOD that became overdue in 2019. Net finance expenses of GHC 19.953 million continue eroding any potential operating profit from the minimal revenue base.
Approximately 80 percent of the company’s long term debt is owed to Ghanaian institutions, with GCB Bank alone holding over GHC 100 million in loans. Industry publication Graphic Online reported in July 2024 that several haulage vehicles have been grounded, cocoa sheds closed, and employees disengaged due to the company’s inability to secure funding for cocoa bean purchases.
The two largest shareholders are the Social Security and National Insurance Trust (SSNIT) with 38.10 percent and the Government of Ghana through the Ministry of Finance with 36.69 percent. Together, they control approximately 75 percent of the company’s shares, making PBC effectively state owned.
PBC Limited once ranked number one on the Ghana Club 100, a prestigious ranking of the nation’s top companies. The enterprise controlled over 30 percent of Ghana’s cocoa purchasing market and operated profitably for years after its privatization and listing on the Ghana Stock Exchange in May 2000.
The company’s subsidiaries include Golden Bean Hotel Limited, established in 2015 to diversify into the hospitality industry, and PBC Shea Limited, created in 2010 to process shea nuts into shea butter. The USD 10 million loan from COCOBOD was intended to finance the shea nut operation, but the venture has been unsuccessful.
A collapsed PBC would result in over 1,000 employees losing jobs, according to analysis by business commentators. The failure would also increase non performing loans on the balance sheets of creditor banks, further straining Ghana’s financial sector. For employees nearing retirement, delayed or halted pension contributions could create significant shortfalls in expected benefits.
No dividend was recommended for shareholders for either 2023 or 2024. Accumulated losses have driven group retained earnings to deeply negative GHC 610.925 million as of September 2023.
Analysts have called on the government and SSNIT to consider a financial bailout package addressing immediate liquidity needs, despite Ghana’s International Monetary Fund (IMF) program constraints. Some observers argue PBC Limited is too big to fail given the economic and social consequences of its collapse, though questions persist about corporate governance and financial management practices that led to the current crisis.
