The Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has announced that cocoa purchases for the 2026/27 crop season will be financed through $1 billion to be raised from the domestic bond market.

According to him, the initiative forms part of efforts to strengthen Ghana’s cocoa financing system and reduce dependence on foreign borrowing and external lenders.

The proposed financing model comes at a time when authorities are seeking to revive the cocoa sector following the reduction in farmgate cocoa prices earlier in 2026.

The arrangement is also expected to deepen the local capital market, encourage greater participation by institutional investors and strengthen confidence in the domestic bond market after the successful resumption of treasury bond issuance earlier this year.

Under the new model, funding will be mobilised through financial instruments such as commercial paper and commercial notes while leveraging domestic liquidity sources.

Speaking at the opening of the 130th meeting of the Monetary Policy Committee (MPC) at the Bank of Ghana headquarters, Dr Asiama described the initiative as a major shift in the country’s cocoa financing strategy.

He explained that the model would help promote price stability, support sustainable incomes for cocoa farmers and improve long term debt management.

“This is a significant shift to reduce reliance on dollar funding and foreign lenders,” the Governor stated.

The Monetary Policy Committee, which is the central bank’s main decision-making body responsible for setting policy rates and regulating money supply, began its 130th meeting yesterday.

A press conference is expected to be held after the meeting to announce the committee’s decision on the policy rate, which currently stands at 14 per cent.

The six-member committee is being supported by economic advisors, experts and key stakeholders, including Presidential Advisor on the Economy Seth Terkper, representatives of the Ghana Association of Bankers and the Association of Ghana Industries.

Dr Asiama identified rising global energy prices and inflationary pressures as key risks likely to influence the committee’s policy decisions.

According to him, the prolonged conflict in the Middle East has triggered sustained increases in global crude oil prices, putting renewed pressure on fuel costs, transportation and consumer prices in Ghana.

He warned that the combination of external commodity price shocks and domestic energy supply challenges could undermine inflation control efforts and affect recent macroeconomic gains.

“The committee would carefully assess measures needed to keep inflation expectations anchored while sustaining economic stability and credit growth within the economy,” he said.

The Governor noted that Ghana’s economic conditions had improved significantly since the previous MPC meeting held in March due to ongoing reform efforts.

However, he cautioned that those gains were now being tested by worsening global conditions linked mainly to the Middle East conflict and its impact on energy and commodity prices.

He explained that the closure of the Strait of Hormuz had intensified pressure on global oil prices, with inflationary effects already being felt across both advanced and emerging economies.

Dr Asiama further disclosed that Ghana’s engagement with the International Monetary Fund (IMF) had continued following the completion of the sixth and final review under the Extended Credit Facility (ECF) programme last Friday.

According to him, the IMF acknowledged Ghana’s stabilisation gains, including lower inflation, improved external reserves, stronger performance of the cedi and enhanced debt sustainability.

He said discussions were also progressing towards a 36-month non-financing Policy Coordination Instrument (PCI) arrangement aimed at strengthening reforms, improving policy credibility and reducing dependence on IMF financial support.

The Governor explained that the PCI arrangement would help preserve the signalling benefits of IMF engagement while reinforcing domestic ownership of reforms and fiscal discipline.

“Of particular relevance to the Bank of Ghana, the PCI will incorporate commitments relating to the BoG's monetary policy framework, improve on the transmission mechanism, enhance the liquidity forecasting framework, and maintain conditionality around the inflation targeting regime, with continued emphasis on forward-looking policies and the anchoring of inflation expectations,” he stated.

He added that the arrangement would also support efforts to strengthen the Bank of Ghana’s balance sheet by reducing quasi-fiscal activities and improving transparency and oversight of the Domestic Gold Purchase Programme.