Ghana is struggling to raise money on its domestic market to finance cocoa purchases for the 2026/27 season, sources with knowledge of the sector told JoyNews Research, as licensed buyers warn that GH¢4 billion ($350 million) in unpaid debts could hinder them from buying beans from farmers.

Ghana opened its cocoa season in early August last year. By mid-September, this year's campaign has yet to begin, more than two weeks after Ivory Coast, the world's top producer, launched its main crop.

The sources said local institutional investors  are asking for a higher risk premium and coupon rate before committing funds.

Higher interest costs had already pushed COCOBOD out of the offshore syndicated loan market, the sources said. For more than 30 years, the regulator financed its crop purchases with syndicated loans from international banks.

COCOBOD had secured those loans at rates as low as 1.5% in 2016, but the rate rose to 8%, and the board ran into setbacks in a 2024 attempt to raise a $1.5 billion facility, according to local media reports.

Syndicated funding dried up after Ghana's 2022 economic crisis, and about GH¢7.93 billion of COCOBOD's cocoa bills were caught in the 2023 debt exchange. For the 2024/25 season, COCOBOD abandoned the syndicated loan model for the first time since 1992, relying instead on direct financing from international traders.

Any attempt to return to the syndicated market could still attract similarly high interest rates, the sources said.

Rollover contracts have added to the risk. In the 2023/24 season, COCOBOD projected output of 800,000 tonnes but harvested 432,145 tonnes, forcing it to roll over 333,767 tonnes at an average price of $2,661 per tonne, well below market levels. COCOBOD's chief executive put the cost at an estimated $941.58 million in foregone revenue.

Those contracts also influenced the trader financing that replaced the syndicated loan. Finance Minister Dr. Cassiel Ato Forson said buyers were drawn by the rollover price of $2,661 per tonne when the market price was around $2,000, and that once the gap closed, their incentive disappeared, leaving that model unsustainable.

In February, Dr. Forson announced that Ghana would turn to its own market. The new cocoa bonds is expected to be issued domestically on COCOBOD's balance sheet to raise a revolving fund for buying beans within each crop year, with export proceeds used to retire the bonds in the same season.

The Producer Price Review Committee cut the farmgate price to GH¢41,392 per tonne from GH¢58,000, or GH¢2,587 per bag, effective February 12, with the Finance Minister blaming the "unwillingness of buyers to purchase Ghana's cocoa" because it had become uncompetitive and expensive.

COCOBOD is targeting local pension funds, commercial banks, international participants and other participants in the cocoa value chain for its commercial paper programme. Its Deputy Chief Executive for Finance and Administration, Ato Boateng, has named pension funds as the anchor. Dr. Cassiel Ato Forson has said the programme will not rely solely on Ghanaian banks but will also draw on pension funds and non-resident investors.

The Chamber of Cocoa Marketers, Ghana, which represents licensed buying companies, said the country would need about GH¢26 billion ($2.3 billion) to fund the season should farm-gate price increase by the expected 6%. COCOBOD Chief Executive Dr. Ransford Abbey has said that if the crop requires GH¢26 billion, the board intends to raise about half, using 270-day commercial notes, and believes there is enough liquidity to raise about GH¢16 billion every year.

The Chamber said its members are owed about GH¢4 billion from the just ended season alone and that banks which extended them credit are pressing for repayment. It wants the government to pay the debt, saying it could hinder its members from buying cocoa from farmers.

Industry players say Ghana could raise its farmgate price by about 6%. Bloomberg reported on Sept. 9 that a price of GH¢2,737 per 64-kg bag, up from GH¢2,587, had been proposed. The price is set by the Producer Price Review Committee, which includes COCOBOD and the Finance Ministry.

Whatever figure is announced will be the first under the new Ghana Cocoa Board Act, which President John Mahama signed on Aug. 26. The law guarantees farmers a minimum of 70% of the gross free-on-board (FOB) export value of their cocoa.

Ghana had agreed with Ivory Coast to harmonise their cocoa policies, but Ivory Coast has already announced its price. It kept its farmgate price at 1,200 CFA francs per kg for the 2026/27 main crop, 57.1% below the 2,800 CFA francs per kg set a year earlier.

There are concerns in the industry that the Ivorian price could influence Ghana's decision. Industry sources have also said low prices in Ivory Coast could trigger smuggling into Ghana, Liberia and Guinea and possibly Togo.