Ghana’s Cocoa Industry Is at a Breaking Point—LICOBAG Wants a Hard Reset

Ghana’s cocoa industry, long regarded as the backbone of the country’s agricultural economy, is facing a moment of reckoning. Without swift and deliberate reforms, the sector risks sliding into a prolonged period of instability, eroding farmer confidence, weakening Licensed Buying Companies (LBCs), and undermining Ghana’s standing in the global cocoa market.

That was the stark warning from the Licensed Cocoa Buyers Association of Ghana (LICOBAG), which has proposed a sweeping set of funding, pricing and governance reforms aimed at restoring stability, professionalism and financial discipline across the cocoa value chain.

Speaking at a press conference in Accra on Thursday, February 5, LICOBAG’s Executive Secretary, Victus Dzah, described a sector weighed down by funding constraints, weak sales strategy and governance lapses.

“If these measures are carefully considered and implemented, the cocoa sector can be restored to its glory days,” he said.

Funding Is the Sector’s Achilles’ Heel

At the heart of LICOBAG’s proposals is an urgent call to restructure the cocoa purchasing funding model, which the Association says has become misaligned with operational realities on the ground.

LICOBAG is advocating a hybrid financing framework—one that blends the old syndicated funding facility, both local and international, with the current structure.

“We suggest a review of the current funding model to allow for a hybrid arrangement… to enable real-time payment for cocoa purchased and delivered to port by LBCs,” Mr Dzah explained.

Industry insiders say delays in payment have become one of the most destabilising features of the current system, squeezing LBC liquidity and increasing financial stress across the supply chain.

To stem further attrition, LICOBAG also proposed a limited seed-fund regime to keep struggling Licensed Buying Companies operational—arguing that the collapse of LBCs would ultimately hurt farmers and COCOBOD itself.

Emergency Financing Needed—Now

LICOBAG did not mince words on the urgency of government intervention. According to the Association, the state must secure emergency financing to pay for cocoa already produced.

“Government must, as a matter of urgency, secure a facility to pay for an estimated 300,000 metric tonnes of cocoa in a phased manner between now and September,” Mr Dzah warned.

Failure to act, he said, would deepen distress across the value chain—from farmers and hauliers to buying companies and exporters.

Ring-Fence Cocoa Funds or Risk Collapse

Beyond financing, LICOBAG raised concerns about financial discipline and governance, calling for strict ring-fencing of funds raised for cocoa purchases.

“Funds secured for cocoa purchases must be ring-fenced and used strictly for that purpose, as the core business of COCOBOD is to purchase cocoa beans produced by farmers,” Mr Dzah stated.

The warning reflects long-standing industry anxieties about diversion of funds and the expansion of COCOBOD into non-core activities at the expense of its primary mandate.

Pricing Uncertainty Is Hurting Confidence

The Association also called for the immediate determination of the farmgate price, arguing that prolonged uncertainty is damaging confidence across the sector.

“A clear determination on the farmgate price is critical to allaying the apprehension of actors across the value chain,” Mr Dzah noted.

With global cocoa prices volatile and production pressures mounting, stakeholders say predictability—not speculation—is what farmers and buyers need most.

Fix the Trading Room, Restore Professionalism

LICOBAG did not spare Ghana’s cocoa marketing machinery. It urged COCOBOD, the Cocoa Marketing Company (CMC), and traders to adopt a more proactive and disciplined sales strategy.

“CMC, COCOBOD and traders must be more proactive in their sales strategy to yield optimum results, while COCOBOD must increase supervisory oversight of the trading room,” Mr Dzah said.

Equally critical, he argued, is rebuilding professional capacity and morale within the Cocoa Marketing Company through structured training, credible succession planning and security of tenure for staff.

Beyond Rhetoric: A Call for Structural Reform

In one of his strongest remarks, Mr Dzah called for a fundamental reset of cocoa sector reforms.

“Serious efforts must be made to revamp the cocoa industry beyond rhetoric and theatrics,” he said.

LICOBAG is urging COCOBOD to divest from non-core activities and refocus resources on extension services, farmer productivity and market efficiency.

The Association also stressed the need for stronger institutional collaboration and better communication between LICOBAG and COCOBOD, while pressing government to fast-track the passage of a new Act on cocoa pricing mechanisms.

A Sector at a Crossroads

Ghana’s cocoa industry stands at a crossroads. LICOBAG’s proposals reflect growing impatience within the private buying sector—and a clear message to policymakers: incremental fixes will no longer suffice.

Restoring confidence will require funding certainty, pricing clarity, disciplined governance and a return to core fundamentals. The question now is whether those responsible for steering the sector are prepared to act with the urgency the moment demands.