A banking and financial consultant has raised serious concerns about the Ghana Cocoa Board’s (COCOBOD) plan to raise up to $1 billion through domestic cocoa bonds to finance cocoa purchases for the 2026/2027 crop season, warning the programme faces deep structural and financial vulnerabilities.
Dr. Richmond Atuahene, in an analysis shared with industry stakeholders, argued that while the shift away from foreign syndicated loans appears strategically attractive, the proposed bonds carry significant market, liquidity and credibility risks that could threaten their success.
COCOBOD Chief Executive Officer (CEO) Dr. Randy Abbey announced the bond programme as a replacement for the offshore syndicated loan model that financed cocoa purchases for decades. The plan involves cedi-denominated bonds designed to create a revolving fund to buy cocoa from farmers and repay investors within the same crop season through export proceeds.
The shift follows COCOBOD’s failure to deliver more than 330,000 tonnes of cocoa sold under forward contracts during the 2023/2024 season, resulting in estimated losses exceeding $1 billion as global cocoa prices surged. Cocoa bills were subsequently restructured into longer-term bonds under the Domestic Debt Exchange Programme (DDEP), further damaging investor confidence.
Dr. Atuahene identified the trust deficit left by the DDEP as one of the biggest threats to the new bond programme, noting that many banks, pension funds and individual bondholders who suffered losses during the restructuring now prefer short-term treasury bills over longer-duration instruments.
Falling global cocoa prices compound the risk. Prices have dropped from highs of around $7,200 per tonne to approximately $4,100 per tonne, reducing the export revenues expected to service the bonds. COCOBOD’s debt portfolio has meanwhile ballooned to nearly GH¢33 billion, with billions due for repayment within two years.
The consultant also questioned whether Ghana’s domestic financial market can absorb annual issuances of $1 billion to $1.5 billion without crowding out private sector credit, projecting that investors may demand coupon rates of between 10 and 14 percent or higher to compensate for perceived risks.
Dr. Atuahene warned that without governance reforms, production recovery and credible repayment guarantees, the bond programme risks becoming another short-term fix to a long-term structural crisis in Ghana’s cocoa sector.
“Without comprehensive structural reforms, stronger governance, and improved production performance, the proposed bond programme could face significant resistance from investors,” he cautioned.
Cocoa output has declined nearly 50 percent over the past three years due to swollen shoot disease, illegal mining, climate change and underinvestment in farms, further weakening the export revenue base on which bond repayment depends.
