President of the Licensed Cocoa Buyers Association of Ghana (LICOBAG), Samuel Adimado, has raised alarms over a “looming collapse” in the cocoa sector due to severe funding and liquidity challenges.
Speaking on Adom FM’s morning show Dwaso Nsem, Mr. Adimado disclosed the urgent need for the Ghana Cocoa Board (COCOBOD) to address delays in payments to Licensed Buying Companies (LBCs), which in turn affects farmers across the country.
“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. Wherever COCOBOD can get the money, they should try and get it to us so we can pay our members, and our members can also pay the farmers” he said.
Mr. Adimado explained that the sector’s funding challenges are having serious consequences for both farmers and LBCs.
Many companies have been forced to pre-finance cocoa purchases using local bank loans, which carry high-interest rates of about 29.8 percent, due to delays in COCOBOD payments.
“The traditional syndicated funding has failed, and a hybrid funding model is needed to prevent further delays in payments to farmers,” Mr. Adimado added.
He also appealed directly to COCOBOD, stressing the need to settle outstanding payments for cocoa beans already supplied by LBCs.
His warnings come amid reports of an ongoing financial crisis in the Ghanaian cocoa industry, which threatens to disrupt the livelihoods of thousands of cocoa farmers if immediate action is not taken.
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