The Ghana Cocoa Board (COCOBOD) has warned Licensed Buying Companies (LBCs) against purchasing cocoa beans from farmers on credit, with repeat offenders facing the possibility of losing their operating licences.
COCOBOD Chief Executive Officer, Dr Randy Abbey, said the directive is part of efforts to improve liquidity in the cocoa purchasing system and ensure farmers receive prompt payment for their produce.
He said the regulator had formally communicated the new position to LBCs and also advised farmers not to hand over cocoa beans without receiving payment.
Dr Abbey said the restriction was necessary because delays in financing have hindered LBCs’ ability to purchase cocoa efficiently, leaving some companies heavily indebted to financial institutions.
“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 explained that COCOBOD was not immediately withdrawing any licences because of past breaches.
However, companies that disregard the directive in future could face sanctions, including the revocation of their licences.
“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.
He also urged farmers to comply with the directive by refusing to sell their cocoa on credit.
“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 directive comes ahead of the implementation of a new financing arrangement for cocoa purchases from the 2026/27 crop year.
Dr Abbey said the model is expected to provide adequate funding for cocoa procurement and related activities throughout the year, reducing delays in payments to LBCs after they take over cocoa receipts from farmers.
“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round,” he said.
“Hence, beginning the 26/27 crop year, we hope to eliminate the delays in the payment of cocoa taking over receipts, which have been the bane of LBC since 2020.”
According to the COCOBOD CEO, improving payment speed would enable LBCs to purchase cocoa more quickly, reduce their exposure to bank debt, and improve the profitability of cocoa marketing.
He added that the financing reforms would also support efforts to expand local cocoa processing and value addition by improving domestic processors’ access to cocoa beans.
Dr Abbey said the reforms form part of the broader changes introduced under the Ghana Cocoa Board Bill 2026, which he said guarantees farmers 70% of the gross Free On Board value while allowing producer prices to be reviewed during the season based on market developments.
“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.”
