The Licensed Cocoa Buyers Association of Ghana (LICOBAG) has proposed far-reaching reforms to rescue Ghana’s cocoa industry from what it describes as an impending collapse, urging government and COCOBOD to urgently review the current funding model, secure emergency financing, and overhaul sales and governance structures in the sector.
Addressing a press conference on behalf of the association, the Executive Secretary of LICOBAG, Mr. Vitus Dzah, said persistent challenges in the post-harvest stage of the cocoa value chain—from the farm gate to the terminal—are threatening the survival of Licensed Buying Companies (LBCs), worsening farmers’ livelihoods, and weakening Ghana’s position in the global cocoa market.
According to LICOBAG, the industry’s crisis is rooted in four major problems: inadequate funding, a flawed COCOBOD/CMC/traders’ sales strategy, lack of commitment to revamping the sector, and excessive political interference.
Mr. Dzah explained that since the 2023/2024 season, COCOBOD has been unable to secure its traditional annual syndicated facility of about US$1.3 billion, raising instead only US$500 million, six months after the season had already opened. This forced LBCs to pre-finance cocoa purchases from farmers at extremely high interest rates, while COCOBOD delayed payments for cocoa delivered to port for up to six months.
“These developments pushed many LBCs into huge debts and led to the collapse of several companies. To date, the promised compensation from COCOBOD for the high financing costs has not been paid,” he stated.
LICOBAG noted that the introduction of the 60/40 and later 80/20 funding models eased some liquidity pressure but created new problems, including leaving many LBCs without access to funding, delays in payments for stocks delivered to port, and increased smuggling due to inadequate purchasing capacity.
Against this backdrop, LICOBAG is calling for a review of the current funding model to allow a hybrid system that combines limited syndicated facilities—local or international—with the existing arrangement to ensure real-time payment for cocoa purchased and delivered.
The association is also proposing the establishment of a limited seed-fund regime to support struggling LBCs and prevent further company collapses.
In addition, LICOBAG is urging government to secure an emergency facility to pay for an estimated 300,000 metric tonnes of cocoa in a phased manner between now and September, warning that failure to do so will deepen the crisis.
Mr. Dzah further stressed that funds secured for cocoa purchases must be ring-fenced strictly for that purpose, since buying cocoa from farmers is COCOBOD’s core mandate.
LICOBAG also called on government to urgently determine and announce the current farmgate price of cocoa to reduce uncertainty and restore confidence among farmers and value-chain actors.
On sales and marketing, the association wants CMC, COCOBOD and traders to become more proactive in their sales strategy, improve oversight of the trading room, and build the professional capacity of cocoa traders, including restoring a credible succession plan that guarantees security of tenure and boosts staff morale.
Beyond financing and sales, LICOBAG is advocating serious, long-term efforts to revamp the cocoa industry, including divesting COCOBOD from non-core businesses, outsourcing them to the private sector, and placing strong emphasis on effective extension services to farmers.
The association also demanded greater openness and stronger communication between LICOBAG and COCOBOD, and urged government to fast-track a new legal framework and pricing mechanism to restore COCOBOD to its former glory.
“Ghana’s cocoa industry cannot survive on rhetoric and theatrics. What is required now is bold, practical action,” Mr. Dzah concluded.
