The Ghana Cocoa Board (COCOBOD) has warned Licensed Buying Companies (LBCs) against purchasing cocoa beans from farmers on credit, stressing that repeated breaches of the directive could lead to the revocation of their operating licences.
COCOBOD Chief Executive Officer, Dr Randy Abbey, said the directive is intended to improve liquidity in the cocoa purchasing system and ensure farmers receive prompt payment for their produce.
He said COCOBOD has formally notified all LBCs of the directive and has also urged cocoa farmers not to release their beans without receiving payment.
According to Dr Abbey, financial difficulties have affected some LBCs, with several companies accumulating significant debts to financial institutions. This has, in turn, slowed down cocoa purchases and created delays within the purchasing system.
“The arrangement is to aid the shorter turnaround time for LBCs so that it can quicken the pace of purchases, eliminate indebtedness to banks and improve the efficiency and profitability of cocoa purchases,” he said.
Speaking at the launch of the Chamber of Cocoa Marketers, Dr Abbey clarified that COCOBOD was not currently revoking licences over previous violations. However, he warned that any future breach of the directive would attract serious sanctions.
“We are not withdrawing anybody’s license. But we have written to the effect that if it happens again, your license will be revoked because it is against the terms of your license,” he said.
Dr Abbey also urged farmers to reject any purchasing arrangement that requires them to hand over their cocoa without immediate payment.
“We have also told the farmers that LBCs are not supposed to buy cocoa on credit from you. So don’t go and take your cocoa to any purchasing clerk on credit,” he added.
The warning comes ahead of the implementation of a new financing arrangement for cocoa purchases under the 2026/27 crop season.
Dr Abbey said the new model is designed to provide sufficient funding for cocoa procurement and related activities throughout the year, helping to minimise delays in payments to LBCs.
“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round,” he said.
He explained that the reforms would allow LBCs to access financing more quickly, reduce their dependence on bank borrowing and improve the efficiency and profitability of cocoa marketing.
The new measures are also expected to strengthen local cocoa processing and value addition by improving domestic processors’ access to cocoa beans.
Dr Abbey said the reforms form part of wider changes introduced under the Ghana Cocoa Board Bill 2026, which guarantees cocoa farmers at least 70 per cent of the gross Free on Board (FOB) value and allows producer prices to be reviewed during the season in response to changing market conditions.
“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.
“These reforms are resetting the cocoa sector for growth and industrialisation.”
By: Prince Martey-Sogar