An Associate Professor of Finance at Andrews University, Williams Kwasi Peprah, has raised concerns about the financial implications of government reforms in the cocoa sector, warning that the move could deepen the debt of the Ghana Cocoa Board (COCOBOD) if not properly managed.

Speaking on JoyNews’ The Pulse, Prof. Peprah said the reforms appear intended to protect cocoa farmers’ incomes at a time when global cocoa market conditions are changing and the Ghanaian cedi is strengthening.

“As the world market is going down and noticing the strengthening of the cedi, I am certain they are trying to ensure the cocoa farmer receives a large portion of the proceeds of the cocoa beans,” he noted.

However, he questioned how the government intends to finance the potential shortfall created by the reforms, particularly if producer prices are maintained despite falling international prices.

“The only challenge is who pays for the differentials? Is it going to be the Ministry of Finance or COCOBOD?” he asked.

Prof. Peprah cautioned that placing the burden solely on COCOBOD could worsen the agency’s already strained finances.

He suggested that one possible solution could be restructuring COCOBOD’s debt, including converting some of the agency’s obligations to the government into equity, to ease pressure before the new market transactions begin.

He added that a clearer commitment from the Ministry of Finance may be needed, especially if losses arise from maintaining higher farmer payouts.

“Unless probably… the Finance Ministry decides to take care of any loss that may arise,” he said.

Government reforms in the cocoa sector have been presented as part of efforts to improve efficiency, increase farmer benefits, and sustain Ghana’s competitiveness in the global cocoa industry.