Ghana’s cocoa sector regulator plans to raise approximately US$1 billion through cedi-denominated domestic bonds to finance cocoa purchases, marking its most significant financing shift in more than three decades and a major test of investor confidence in the country’s recovering debt market.
The Ghana Cocoa Board (COCOBOD) is pursuing the issuance ahead of the 2026/2027 crop season, moving away from the offshore syndicated pre-export loan facilities it has relied on since the early 1990s. The shift comes in the aftermath of Ghana’s 2022/2023 Domestic Debt Exchange Programme (DDEP) and COCOBOD’s own debt restructuring, which together eroded investor confidence in government-linked securities.
Speaking at the Africa Cocoa Investment Forum in London, COCOBOD Chief Executive Dr. Randy Abbey said easing inflation and declining borrowing costs had created the right conditions for a large domestic issuance.
“We believe that the interest rates in Ghana now are at the right place,” he said.
The proposed issuance, equivalent to between GH¢11 billion and GH¢12 billion, is intended to fund the full cocoa crop domestically, reduce exchange rate risks associated with dollar borrowing and revive Licensed Buying Companies (LBCs) that have struggled under the existing financing structure.
The scale of the ambition, however, confronts serious market headwinds. COCOBOD carries an estimated GH¢32 billion in total liabilities, with approximately GH¢11.9 billion due for repayment in 2025 alone. LBCs are owed about GH¢10.1 billion, contributing to payment delays to farmers and operational disruptions across the value chain. The institution also failed to deliver more than 330,000 tonnes of cocoa sold under forward contracts before global prices surged in 2023/2024, resulting in losses estimated at over US$1 billion and further damaging its credibility with both domestic and international lenders.
Cocoa production has also weakened sharply. Output peaked at approximately 1.04 million metric tonnes in the 2020/2021 season before falling to around 531,000 tonnes in 2023/2024, recovering modestly to an estimated 700,000 tonnes in 2024/2025.
Global cocoa prices add another layer of pressure. After briefly exceeding US$10 per kilogramme in early 2025 during a period of acute supply tightness, benchmark prices had fallen to approximately US$3,791 per tonne by mid-May 2026, down about 65 percent year-on-year. Analysts at StoneX forecast global surpluses of 287,000 metric tonnes for the 2025/2026 season and 267,000 metric tonnes for 2026/2027, keeping downward pressure on prices and compressing the export revenues available to service COCOBOD’s debt. Cocoa grindings, a measure of processing demand, also fell 7.2 percent year-on-year in Europe and 16 percent in Asia in the second quarter of 2025, reflecting the extent to which earlier high prices had eroded downstream consumption.
Corporate governance and banking consultant Dr. Richmond Akwasi Atuahene said the post-DDEP trust deficit among investors remained a central obstacle. He warned that the bonds may need to be priced 200 to 400 basis points above government securities to attract institutional investors, and called for the transfer of non-core liabilities including road infrastructure expenditures from COCOBOD’s balance sheet to strengthen its financial position.
Analysts further caution that large-scale domestic issuance could crowd out private sector credit or push domestic yields higher if investor demand proves insufficient to absorb the volume.
Authorities are pursuing accompanying sector reforms, including expanded local cocoa processing, stronger LBC support and programmes to combat swollen shoot disease, illegal mining and climate-related production risks. The Government of Ghana (GoG) views the domestic bond strategy as necessary to reduce dependence on volatile offshore funding and establish a more stable long-term financing structure for the sector.
