Although Ghana Cocoa Board’s (COCOBOD) financial position improved in 2023, the current financial year is proving challenging, the International Monetary Fund has stated.

According to the Washington-based multilateral institution, notwithstanding record-high spot market prices, the weak cocoa production in 2023/24 posed significant challenges to COCOBOD’s ability to deliver on existing forward sales contracts.

As a result, Ghana was unable to take full advantage of high international prices as part of the forward contracts (carrying lower prices than current market prices) had to be rolled over to the 2024/25 season.

The 2024/25 farmgate price was increased by 50%, reflecting the high international prices and the need to reduce incentives to smuggle cocoa and/or use cocoa farmland for illegal gold mining.

COCOBOD also adopted a new financing model to purchase cocoa beans, whereby a combination of self-financing by licensed buying companies and local bank financing will replace the annual international banks’ loan syndication.

The IMF said COCOBOD’s cash flow situation is expected to remain broadly balanced during the current season assuming a rebound in production due to a normalisation of weather conditions—a somewhat realistic assumption based on the latest indications.

In October 2024, the government published the Cocoa Board’s turnaround strategy.

The strategy aims at restoring COCOBOd’s financial sustainability by strengthening financial oversight; maintaining the producer price within the range of 60-70% of international prices to balance the need for a fair distribution of export proceeds to farmers and for covering its financial and operational costs; i rationalizing costs and phasing out quasi-fiscal activities entailed by the financing of cocoa roads and fertilizer programmes.

The cocoa desk established at the Ministry of Finance also continues to review COCOBOD’s financial position with a view to improve financial oversight.