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 Chief Executive Officer, Dr Randy Abbey, disclosed the directive at the launch of the Chamber of Cocoa Marketers, explaining that the measure forms part of broader reforms aimed at improving liquidity, payment discipline and efficiency within Ghana’s cocoa industry.
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 a company’s licence.
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He said the decision was reached following engagements with stakeholders in the cocoa sector, stressing that farmers should also refuse to hand over their cocoa beans to purchasing clerks without immediate payment.
“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,” Dr Abbey said.
He added that LBCs had been cautioned to “sin no more” by ending the practice of buying cocoa on credit from farmers.
The directive comes as COCOBOD prepares to introduce a new financing model for cocoa purchases from the 2026/27 crop year.
Dr Abbey said the new arrangement is expected to provide sufficient liquidity for cocoa purchases and related operations throughout the year, while eliminating 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.
He explained that faster payment cycles would allow LBCs to purchase cocoa more quickly, reduce their exposure to bank indebtedness and improve the overall efficiency and profitability of cocoa marketing.
The reform is also expected to address one of the major challenges that has affected LBCs in recent years — delays in receiving payment after purchasing cocoa from farmers.
Dr Abbey said the financing reforms are also intended to support Ghana’s drive to increase domestic cocoa processing and retain more value from cocoa production within the country.
Under the previous financing structure, he explained, significant quantities of cocoa beans had to be used as collateral to secure financing, a situation that could restrict the availability of raw cocoa beans for local processors.
The new financing mechanism, therefore, is expected to improve access to funds for cocoa procurement while creating greater opportunities for domestic processing and value addition.
The reforms form part of the broader changes introduced under the Ghana Cocoa Board Bill, 2026, which provides for cocoa farmers to receive at least 70% of the gross Free on Board (FOB) value of their cocoa.
The new framework also allows producer prices to be adjusted during the cocoa season in response to relevant market indicators.
Dr Abbey described the measures as a major reset of Ghana’s cocoa industry, arguing that the reforms are necessary to improve the financial sustainability of the sector and strengthen the entire cocoa value chain.
“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.
He noted that the previous COCOBOD legislation dated back to 1984, making the new reforms a significant change in the way Ghana’s cocoa sector is financed, regulated and developed.
According to the COCOBOD CEO, the reforms are ultimately aimed at repositioning the cocoa industry for sustainable growth, increased industrialisation and better returns for farmers and other stakeholders.