The Ghana Cocoa Board (COCOBOD) is close to launching a commercial paper programme to fund cocoa purchases entirely from local investors, reducing its reliance on foreign syndicated loans.
Deputy Chief Executive for Finance and Administration Ato Boateng said COCOBOD has hired all the transaction advisers it needs and nearly finalised the structure. Speaking at the Ghana-UK Investment Summit in London, he said the money would come from three domestic sources: pension funds, commercial banks, and players in the cocoa value chain.
Pension funds are the anchor. Boateng noted they manage about 100 billion cedis and can place up to 35 percent of their assets in eligible instruments. “We could potentially tap into 35% of the 100 billion cedis,” he said.
To draw in banks, whose lending is capped by capital adequacy rules, COCOBOD plans to bring in Development Finance Institutions (DFIs) to widen their capacity. The third leg would offer private placements to major industry stakeholders, including international buyers, giving them a stake in the programme.
The instrument would be a 270 day commercial paper, roughly a nine month maturity matched to the buying cycle that runs from September to January, when COCOBOD purchases about 70 percent of the crop. Funds would be drawn in tranches and repaid as cocoa sales generate cash, limiting borrowing costs.
The plan marks a clear break from the annual offshore syndicated loans that financed cocoa purchases for decades but grew harder to secure amid rising debt and tighter global credit. Finance Minister Cassiel Ato Forson told the same summit that advisers had submitted their report and that the paper would be issued soon in three tranches, subject to Parliament passing a new Cocoa Bill.
Bank of Ghana Governor Johnson Asiama has also pushed the shift, arguing that Ghana’s own capital can carry the load. He noted that pension funds hold more than 100 billion cedis, questioning why the country should struggle to raise a few billion cedis for cocoa.
The reforms land amid wider debate over the cocoa sector, including farmer complaints about producer prices and concerns over the industry’s long term sustainability.
