Accra: The assertion by the current Chief Executive of Ghana Cocoa Board (COCOBOD) that the Board's inability to pay Licensed Buying Companies (LBCs) is due to defaults on syndicated loans during the previous NPP administration has been categorically refuted. COCOBOD has maintained a spotless record in international financial markets, consistently meeting all syndicated loan obligations.
According to Ghana Web, COCOBOD has never defaulted on any syndicated loan, a fact recognized by global banks involved in the Board's cocoa financing for decades. Every syndicated loan raised by COCOBOD over the past 30 years has been fully repaid, with many settled ahead of schedule. The loans were self-liquidating, repaid from cocoa export proceeds without relying on the national budget. No bank has declared COCOBOD in default, and the claim that a past default explains the current payment failures is factually incorrect.
Under the NPP administration, significant strides were made in cocoa production. When the NPP took office in 2001, Ghana's cocoa production was approximately 330,000 metric tonnes. Through deliberate policy reforms and investments led by President J.A. Kufuor, production more than doubled, reaching over 700,000 metric tonnes. This growth was the result of structured interventions, farmer incentives, and institutional reforms.
From 2007 to 2012, COCOBOD implemented a strategic plan under Hon. Isaac Osei's leadership to achieve 1.0 million metric tonnes. Key programs like CODAPEC, Cocoa Mass Spraying, and the distribution of improved cocoa seedlings were enhanced, resulting in Ghana reaching the 1.0 million metric tonnes mark in 2012. However, production later declined due to a lack of sustained momentum.
In terms of financing, the NPP restructured cocoa financing around 2004, improving the syndicated loan structure and enhancing production data, thereby strengthening repayment certainty and transparency. This led to a reduction in interest margins, translating into significant savings and increased international market trust in COCOBOD under NPP management.
Recognizing the costs and external dependencies of syndicated loans, the NPP pursued long-term structural solutions like the Ghana Commodities Exchange (GCX) and a new cocoa financing model under the Akufo-Addo administration. This buyer-led, transaction-based trade finance model eliminated interest costs associated with cocoa purchases and reduced exposure to volatile international credit markets, successfully implemented for the 2024/25 cocoa season.
Despite record global cocoa prices and a tested interest-free financing model, the current COCOBOD management is facing challenges such as non-payment to LBCs and delayed payments to farmers. The explanation of failure through false claims of past defaults points to mismanagement, driven by political motives to "reset" a functioning cocoa financing solution.
The current Chief Executive is urged to focus on tightening and utilizing the available financing frameworks, engaging with the Ghana Commodities Exchange, and improving the existing financing model. The responsibility now lies with the NDC government and its COCOBOD management team to deliver on Ghana's cocoa sector reforms, rather than distorting history and risking failure.