IMF States COCOBOD Faces Challenges Despite Improved Financial Position in 2023
While Ghana Cocoa Board’s (COCOBOD) financial position showed improvement in 2023, the current financial year is proving to be challenging, according to the International Monetary Fund (IMF).
Despite record-high spot market prices, weak cocoa production in 2023/24 has hindered COCOBOD’s ability to fulfill existing forward sales contracts. This has resulted in Ghana being unable to fully capitalize on high international prices, as some forward contracts with lower prices had to be rolled over to the 2024/25 season.
To address this, the 2024/25 farmgate price was increased by 50% to reflect high international prices and to curb cocoa smuggling and illegal gold mining on cocoa farmland.
COCOBOD has also adopted a new financing model for cocoa bean purchases, which replaces the annual international bank loan syndication with a combination of self-financing by licensed buying companies and local bank financing.
The IMF notes that COCOBOD’s cash flow is expected to remain broadly balanced this season, assuming a rebound in production driven by normalized weather conditions—a scenario that appears increasingly likely based on recent indicators.
In October 2024, the government introduced COCOBOD’s turnaround strategy, aimed at restoring the board’s financial sustainability. The strategy includes strengthening financial oversight, maintaining producer prices within 60-70% of international prices to balance farmers’ needs and operational costs, and rationalizing costs by phasing out quasi-fiscal activities such as cocoa road and fertilizer programs.
Additionally, a cocoa desk at the Ministry of Finance continues to review COCOBOD’s financial position to improve oversight.
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