Ghana Overhauls Cocoa Financing with GH¢16.3 Billion Domestic Bond as Agricultural Ministries Clash Over $640m Resilience Fund

The Ghanaian government has announced a strategic shift in agricultural financing, raising the cocoa producer price to GH¢42,400 per tonne for the 2026/2027 season while simultaneously pivoting toward a GH¢16.3 billion ($1.4 billion) domestic funding model. This transition, led by the Ghana Cocoa Board (COCOBOD), aims to reduce reliance on volatile international markets and provide more stable support for farmers. Under the new Ghana Cocoa Board Act, 2026, the producer price for a 64-kg bag has increased from GH¢2,587 to GH¢2,650, ensuring farmers receive at least 70% of the gross FOB price. COCOBOD Deputy CEO Ato Boateng emphasized that the move to domestic markets is a deliberate strategy informed by past experiences with international finance volatility, rather than an exclusion from global capital markets.

To facilitate this new funding structure, Cocoa Capital PLC has been established to introduce institutional investors, including pension funds and insurance companies, to commercial paper and medium-term bonds. John Awuah, Chairman of Cocoa Capital PLC and CEO of the Ghana Association of Banks, described the GH¢16.3 billion issuance as a closed-ended, self-liquidating transaction where proceeds from cocoa sales will directly repay investors. While the government aims to enhance financial sustainability and prevent smuggling through these reforms, some stakeholders, including George Oduro of the NPP Agric Policy Committee, argue that the 70% share must more clearly reflect global market values and the rising costs of production faced by local farmers.

However, this drive toward agricultural self-reliance is facing significant internal administrative friction. The Ministry of Food and Agriculture (MoFA) has formally urged the Ministry of Finance to reverse its recent decision to withdraw Ghana from the $640 million West Africa Food System Resilience Programme (FSRP). MoFA reports that the withdrawal, communicated to the World Bank without prior consultation, jeopardizes ongoing contracts and commitments totaling GH¢643.87 million. The World Bank has already responded by suspending activities under the programme, which MoFA warns will lead to costly delays for critical irrigation infrastructure and farmer support initiatives under the flagship Feed Ghana Programme.

Despite these tensions, other sectors of the agricultural economy are showing signs of financial recovery and planned growth. The National Food Buffer Stock Company (NAFCO) reported a significant turnaround, posting a GH¢91.7 million profit in 2025 after a previous loss. While CEO George Abradu-Otoo is pushing for a stronger liquidity buffer to mitigate financial risks, the company is preparing for a major infrastructure expansion. Minister of Food and Agriculture Eric Opoku announced that the upcoming 2027 budget will specifically allocate funds for the construction of grain silos to manage future surpluses and strengthen national food security.

As the administration of President John Mahama navigates these complex financial and structural shifts, the focus remains on balancing domestic resource mobilization with international cooperation. The success of the cocoa sector's move to domestic financing and the resolution of the FSRP funding dispute will be critical indicators of Ghana's ability to maintain agricultural productivity. Moving forward, the government must reconcile the Finance Ministry's fiscal decisions with MoFA's operational requirements to ensure that essential projects like the Pwalugu irrigation project and the School Feeding Programme remain adequately funded and supported.