Ghana COCOBOD bans cocoa purchases on credit, threatens LBC licence revocation
The directive comes ahead of a new cocoa financing model that COCOBOD says will improve liquidity, speed up payments and support domestic processing.
GHANA – Ghana Cocoa Board (COCOBOD) has barred Licensed Buying Companies (LBCs) from purchasing cocoa beans from farmers on credit, warning that companies that breach the directive could lose their operating licences.
COCOBOD Chief Executive Officer Dr. Randy Abbey announced the directive at the launch of the Chamber of Cocoa Marketers, saying the measure forms part of efforts to strengthen liquidity, improve payment discipline across Ghana’s cocoa supply chain.
Abbey said COCOBOD had communicated the directive to LBCs and warned that repeated violations could lead to licence revocation.
“The arrangement is to aid the shorter turnaround time for LBCs so that it can quicken the pace of purchases, eliminate indebtedness to banks and improve the efficiency and profitability of cocoa purchases,” Abbey said.
“We have met as part of our stakeholder engagements. I have told them you are not supposed to buy cocoa on credit from farmers. We have all decided that we will go and sin no more,” he added.
Abbey said COCOBOD was not immediately withdrawing any licences but had warned companies about the consequences of future violations.
“So we are not withdrawing anybody’s licence. But we have written to the effect that if it happens again, your licence will be revoked because it is against the terms of your licence,” he said.
“We have also told the farmers that LBCs are not supposed to buy cocoa on credit from you. So don’t go and take your cocoa to any purchasing clerk on credit,” Abbey added.
The directive comes as COCOBOD prepares to overhaul the financing of cocoa purchases. The new funding model is expected to provide liquidity for crop purchases and related operations throughout 2026/27.
“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round. Hence, beginning the 26/27 crop year, we hope to eliminate the delays in the payment of cocoa taking over receipts which has been the bane of LBCs since 2020,” Abbey said.
The reforms are also intended to support domestic cocoa processing and value addition. Abbey said the previous funding structure required much of the crop to be collateralised for financing, limiting access to raw cocoa beans for local processors.
He said the new mechanism would provide liquidity for cocoa procurement while supporting Ghana’s ambition to retain more value domestically.
The reforms form part of the new Ghana Cocoa Board Bill 2026, which Abbey said guarantees cocoa farmers 70% of gross FOB value and allows producer prices to be adjusted during the season in line with market indicators.
“These measures and the new bill constitute the most significant reforms to our industry since 1984,” Abbey said. “These reforms are resetting the cocoa sector for growth and industrialisation.”
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