Ghana raises $288 million debt to finance cocoa purchases

The Ghana Cocoa Board (COCOBOD) has raised 3.39 billion cedis ($288.02 million) through a short-term debt issuance in the domestic market to finance cocoa purchases from farmers as the country’s new crop season gets underway.

Reuters reported the development, citing debt auction results released by Cocoa Capital, the special purpose vehicle responsible for the transaction.

The debt was issued on Monday, October 5.

The issuance attracted an interest rate of 11% and is scheduled to mature in June 2027, although the amount raised fell short of the initial target of 4 billion cedis ($339.85 million).

COCOBOD funding falls below target

The 3.39 billion cedis raised leaves a financing gap of about $51.83 million compared with COCOBOD’s original target.

• The fresh funding is expected to enable Ghana, the world’s second-largest cocoa producer, to release money to licensed buying companies for the purchase of cocoa beans from farmers.
• Ghana’s 2026/2027 cocoa season began on September 25, but purchases faced potential disruption after licensed buyers expressed reluctance to use their own capital without assurances of timely reimbursement.
• The buyers were concerned that delays of several months in recovering their funds could affect cocoa purchases and payments to farmers.

The latest borrowing is the first of three planned debt issuances under COCOBOD’s 16.3 billion cedis ($1.38 billion) domestic financing programme.

The remaining tranches are expected to be issued before the end of the current crop season.

The latest debt raise therefore provides COCOBOD with fresh liquidity for the season, although it still leaves part of its immediate funding target unmet.

Ghana shifts cocoa financing model

COCOBOD has faced persistent financing difficulties since its longstanding syndicated borrowing arrangement with international banks collapsed during the 2023/2024 cocoa season.

A replacement financing model backed by international cocoa traders also failed, worsening liquidity constraints and contributing to delays in payments to farmers during the previous season.

• In May, Nairametrics reported that Ghana was considering a $1 billion domestic bond issuance to finance cocoa procurement during the 2026/2027 season.
• The proposed borrowing marked a shift toward raising funds locally after years of relying heavily on international financing arrangements.
• Earlier reports also showed that Ghana’s licensed cocoa purchasing companies had accumulated an estimated $750 million in bank debt.

The current domestic debt programme reflects Ghana’s broader attempt to rebuild a more reliable financing structure for cocoa purchases.

Nigeria expands cocoa financing

The latest financing arrangement in Ghana comes as cocoa companies and institutions in neighbouring Nigeria are also turning to debt and development financing to support purchases and processing.

• Nairametrics recently reported that Nigerian agribusiness Johnvents Industries Limited was preparing to raise up to N80 billion through commercial paper to strengthen working capital and finance large-scale cocoa procurement.
• The proposed issuance forms part of the company’s N250 billion commercial paper programme, with proceeds expected to support procurement during the main cocoa harvest season.
• In mid-July, Nigeria’s Bank of Industry announced an €85 million long-term financing facility aimed at boosting domestic cocoa processing capacity.

The facility is intended to support manufacturers moving beyond the export of unprocessed cocoa beans and expand local value addition.