The Ghana Cocoa Board (COCOBOD) has directed Licensed Buying Companies (LBCs) to stop purchasing cocoa beans from farmers on credit, warning that companies that violate the directive could have their operating licences revoked.

• COCOBOD bans LBCs from buying cocoa on credit.

• New funding model targets faster payments from 2026/27.

• Reforms aim to boost farmer earnings and local processing.

COCOBOD Chief Executive Officer, Dr Randy Abbey, disclosed this at the launch of the Chamber of Cocoa Marketers, where he outlined measures aimed at improving liquidity, payment discipline and efficiency across Ghana’s cocoa marketing sector.

According to Dr Abbey, COCOBOD has formally communicated the directive to all LBCs and made it clear that any repeat violation could result in the withdrawal of the company’s licence.

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He explained that the directive is intended to shorten payment turnaround times, enable LBCs to purchase cocoa more quickly, reduce their dependence on bank financing and improve the profitability of cocoa marketing.

“You are not supposed to buy cocoa on credit from farmers. We have all decided that we will go and sin no more,” Dr Abbey said.

He also urged cocoa farmers not to hand over their beans to purchasing clerks on credit, stressing that LBCs are not permitted to operate under such arrangements.

The directive comes as COCOBOD prepares to introduce a new financing model for cocoa purchases, which is expected to provide sufficient liquidity for procurement and related operations throughout the year.

Dr Abbey said the new model is expected to take effect from the 2026/27 cocoa crop year and will seek to eliminate delays in payments to LBCs after they take over cocoa from farmers.

He said delayed payments have been a major challenge for LBCs since 2020, affecting their ability to maintain consistent purchasing operations.

“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round. Hence, beginning the 2026/27 crop year, we hope to eliminate the delays in the payment of cocoa takeover receipts, which has been the bane of LBCs since 2020,” he said.

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Faster payment cycles are expected to allow LBCs to accelerate cocoa purchases, reduce their indebtedness to financial institutions and improve the overall efficiency of the cocoa marketing system.

Dr Abbey said the financing reforms will also help increase domestic cocoa processing and value addition.

Under the previous financing structure, significant portions of Ghana’s cocoa crop had to be used as collateral to secure funding. This, he noted, restricted access to raw cocoa beans for local processors.

The new financing mechanism is therefore expected to provide greater liquidity for cocoa procurement while supporting Ghana’s efforts to process more cocoa locally and retain a larger share of the value generated from the commodity.

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The financing reforms form part of broader changes under the Ghana Cocoa Board Bill 2026.

According to Dr Abbey, the new legislation guarantees cocoa farmers 70% of the gross Free on Board (FOB) value of cocoa while allowing producer prices to be reviewed during the season based on prevailing market indicators.

He said the reforms are designed to improve the financial sustainability of the cocoa sector, strengthen the cocoa value chain and ensure more sustainable returns for farmers and other industry stakeholders.

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Dr Abbey described the reforms as a major reset of Ghana’s cocoa industry, noting that the new legislation replaces the framework that had governed COCOBOD since 1984.

“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.

He added that the reforms are intended to create a stronger foundation for growth, increased domestic processing and industrialisation within Ghana’s cocoa sector.