The Ghana Cocoa Board (COCOBOD) has warned Licensed Buying Companies (LBCs) against purchasing cocoa beans from farmers on credit, cautioning that companies that repeatedly breach the directive could have their operating licences revoked.
COCOBOD Chief Executive Officer, Dr Randy Abbey, said the directive forms part of efforts to improve liquidity within the cocoa purchasing system and ensure farmers are paid promptly for their produce.
He said COCOBOD had formally communicated the directive to all LBCs and had also advised farmers not to hand over their cocoa beans without receiving payment.
According to Dr Abbey, delays in financing have affected the ability of LBCs to purchase cocoa efficiently, while leaving some companies heavily indebted to financial institutions.
“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,” he said.
Speaking at the launch of the Chamber of Cocoa Marketers, Dr Abbey clarified that COCOBOD was not immediately revoking any licences over previous breaches.
He, however, warned that any LBC that disregards the directive in future could face sanctions, including the withdrawal of its licence.
“We are not withdrawing anybody’s license. But we have written to the effect that if it happens again, your license will be revoked because it is against the terms of your license,” he said.
Dr Abbey also urged cocoa farmers to comply with the directive by refusing to sell their produce on credit.
“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,” he added.
The directive comes ahead of the implementation of a new financing arrangement for cocoa purchases under the 2026/27 crop year.
Dr Abbey said the new financing model is expected to provide adequate liquidity for cocoa procurement and related operations throughout the year, thereby reducing delays in payments to LBCs after they take over cocoa receipts from farmers.
“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round,” he said.
“Hence, beginning the 26/27 crop year, we hope to eliminate the delays in the payment of cocoa taking over receipts, which have been the bane of LBC since 2020.”
According to the COCOBOD CEO, faster payments will enable LBCs to purchase cocoa more efficiently, reduce their reliance on bank financing and improve the profitability of cocoa marketing.
He added that the financing reforms would also support efforts to expand local cocoa processing and value addition by improving domestic processors’ access to cocoa beans.
Dr Abbey said the measures formed part of broader reforms under the Ghana Cocoa Board Bill 2026, which he said guarantees farmers 70 per cent of the gross Free On Board (FOB) value while allowing producer prices to be reviewed during the season in response to market developments.
“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.
“These reforms are resetting the cocoa sector for growth and industrialisation.”
