By Adnan Adams Mohammed
The Licensed Cocoa Buyers Association of Ghana (LICOBAG) has issued a warning for the nation’s cocoa industry, asserting that a perfect storm of funding shortfalls, flawed sales strategies, and deep-seated policy inconsistencies is pushing the sector toward an irreversible decline.
At a high-stakes press conference in Accra last week, LICOBAG Executive Secretary Victus Dzah painted a grim picture of a sector struggling under the weight of a “liquidity crunch.” He argued that without immediate intervention to restore professionalism and fix the broken financing model, Ghana once the gold standard for global cocoa risks losing its industry to illegal mining (galamsey) and systemic collapse.
The most critical demand from the Association is a fundamental reset of how cocoa is financed. Following COCOBOD’s departure from its traditional international syndicated loan model in 2024, Licensed Buying Companies (LBCs) say they have been pushed into unsustainable debt.
“We suggest a review of the current funding model to allow for a hybrid arrangement,” Mr. Dzah stated. This proposal calls for combining the reliability of the old syndicated facility with the new structure to ensure real-time payments. Currently, LBCs are being forced to pre-finance cocoa purchases at interest rates as high as 29.8%, only to wait months for reimbursement from COCOBOD.
Emergency Measures for 300,000 Metric Tonnes
The Association also sounded the alarm on a growing backlog of unpaid cocoa. LICOBAG is urging the government to secure an emergency facility to pay for an estimated 300,000 metric tonnes of cocoa produced and delivered.
“Cocoa delivered to port since December 2025 remains unpaid,” Mr. Dzah revealed, adding that the delays have caused tensions to boil over at the grassroots level. Reports are emerging of farmers arresting purchasing clerks who are unable to pay for delivered beans.
LICOBAG’s “Roadmap to Recovery”
Beyond the financial metrics, the crisis is threatening the quality of Ghana’s “Premium A” beans. With buying stalled, many farmers have resorted to storing unsold cocoa in fertilizer bags—a practice that poses severe contamination risks and could lead to mass rejections at the international level.
“Serious efforts must be made to revamp the cocoa industry beyond rhetoric and theatrics,” Mr. Dzah concluded, calling for a “paradigm shift” that insulates the Ghana Cocoa Board from political interference and restores security of tenure for its technocrats.
As the 2025/2026 season reaches a critical juncture, all eyes are now on COCOBOD and the Ministry of Finance to see if they will heed the call for a “hybrid” financing return or double down on the current model that buyers say is failing.
