Government steps in to cover COCOBOD’s $150m cocoa losses

Ghana’s government has announced it will absorb losses of approximately $150 million incurred by the Ghana Cocoa Board (COCOBOD), following a sharp reduction in the cocoa farmgate price and mounting arrears owed to farmers.

For the first time since 2020, the farmgate price has been cut, by 28 percent, in response to falling global cocoa prices. The move has raised concerns among farmers, many of whom had already supplied beans under the previous rate but had not yet been paid.

Finance Minister Dr. Cassiel Ato Forson confirmed that Cabinet has directed COCOBOD to begin immediate payments to affected farmers. “Cabinet has directed COCOBOD to commence immediate payment of all affected cocoa farmers,” he said, assuring that outstanding arrears would be cleared.

Deputy Finance Minister Thomas Ampem Nyarko explained that the government would shoulder the financial burden to ensure farmers are not disadvantaged. “There are some 50,000 tons of cocoa [that farmers have already supplied]. Government has agreed to [pay] the farmers the price that was agreed with them earlier. That means COCOBOD is going to make huge losses of about $150 million. Government is absorbing that cost,” he told Joy FM.

At current exchange rates, the losses translate to roughly GHS 1.6 billion, a significant fiscal commitment at a time when Ghana is grappling with broader economic pressures.

The intervention underscores the government’s determination to stabilize the cocoa sector, which remains a cornerstone of Ghana’s economy and a vital source of livelihood for millions of farmers. Analysts say the decision reflects both the political sensitivity of cocoa pricing and the need to maintain farmer confidence amid volatile global markets.

While the immediate payments will provide relief, questions remain about COCOBOD’s long-term financial health. The institution has faced liquidity challenges in recent years, raising concerns about sustainability if global cocoa prices continue to fall.

For now, the government’s move offers reassurance to farmers, ensuring they are paid at the previously agreed rate of just over $5,200 per tonne, even as international market conditions shift.