Ghana plans to raise $1 billion in domestic cocoa bonds

Ghana is planning to raise $1 billion through domestic bonds to fund cocoa purchases from farmers, part of an overhaul of the way it delivers the commodity to global buyers.

The $1 billion debt will be issued ahead of the 2026-27 season, which begins around August, according to a person familiar with the plans, who asked not to be named because the discussions aren’t public.

The bond will be denominated in cedi, easing the country’s reliance on dollar funding and foreign lenders, according to Randy Abbey, the head of the industry regulator, the Ghana Cocoa Board.

“We are looking at funding the entire crop,” Abbey, said at the Africa Cocoa Investment Forum in London on Wednesday.

“We believe that the interest rates in Ghana now are at the right place for us to go into the market.”

The move also aims to create a more stable funding regime, Abbey said. He didn’t comment on the value of the bonds and a spokesperson for the Cocobod didn’t return phone calls seeking comment on the timing and value of the debt.

The world’s second-largest cocoa grower had outlined plans to issue bonds earlier this year as it looks to assert greater control over its supply chain and better align its market with international prices.

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That should help its cocoa industry to navigate the kind of sharp price swings that have buffeted the markets over the last few years.

Ghana’s domestic cocoa market has been tightly state-controlled through the Cocobod, which pays both domestic and foreign-owned licensed buying companies for beans delivered to its warehouses. The country pays a fixed price set at the beginning of the harvest.

When cocoa futures in New York soared to an all-time high in 2024, and then crashed more than 70% thereafter, the system made it difficult both for farmers to benefit from the rally and traders to remain profitable on the decline. With domestic prices well above global levels, warehouses and ports became clogged with unsold beans.

In February, the country said it would introduce a flexible pricing system — allowing it to adjust what it pays farmers more frequently — and to issue domestic bonds for cocoa purchases to raise revolving funds, using the beans as collateral.

Over the last few years, the regulator has tapped traders for loans to fund its cocoa purchases from farmers, but the market upheaval has left it struggling to repay. Any change in the buying mechanism or issuing bonds to fund the purchase will require parliamentary approval.