Ghana’s Cocoa Sector Suffers US$1 Billion Loss, Finance Minister Explains Causes
Ghana’s cocoa sector has recorded losses exceeding US$1 billion, Finance Minister Dr. Ato Forson has revealed, attributing the crisis to uncompetitive global prices, liquidity challenges, and unprecedented production shortfalls.
Speaking at a press briefing, Dr. Forson said, “The current situation is largely driven by the unwillingness of buyers to purchase Ghana’s cocoa because it has become uncompetitive. Cocoa from other producing countries is now selling at prices significantly lower than the producer price of Ghana.”
He pointed to financial strains at the Ghana Cocoa Board (COCOBOD) as a major contributor. “COCOBOD did not have the liquidity to purchase cocoa from farmers and stock for hedging or other trading decisions. This was due to the financing model invented in 2024/25 when the syndicated loan failed. Under that model, the buyers, or off-takers, financed the purchases,” he explained.
The Minister detailed COCOBOD’s deteriorating finances: “By 2022, COCOBOD’s finances had deteriorated badly. It defaulted and restructured the Cocoa Bills in 2023. For the first time, the annual syndication suffered significant delays due to loss of confidence in the Ghanaian economy. The first tranche was received on 22nd December 2023, four months after the commencement of the season.”
Dr. Forson also revealed the scale of the production shortfall. “COCOBOD projected an output of 800,000 tonnes and committed 786,672 tonnes in contracts. However, actual production was 432,145 tonnes, a deviation of 45% from the projected output. Variations in crop forecasts typically range between 5% to 15%. This deviation was unprecedented,” he said.
The shortfall forced COCOBOD into costly rollover contracts at high prices, resulting in the massive loss. “This loss would have gone to cocoa farmers and other stakeholders, but COCOBOD could not pay the final tranche of the syndicated loan due in July 2024. Even after receiving a US$70 million bridge financing from the Ministry of Finance, COCOBOD defaulted, highlighting the dire financial straits of the organization at the time. This debt has since been inherited by the current management,” Dr. Forson added.
The Minister concluded by emphasizing the need for reforms to restore confidence in Ghana’s cocoa sector. “We must urgently address pricing, financing, and operational challenges to safeguard the livelihoods of our cocoa farmers and ensure Ghana remains competitive in the global market,” he said.
