Business News of 2026-09-24
COCOBOD funding plans face challenges as companies prepare to issue bonds
Ghana Cocoa Board (COCOBOD) is facing an increasingly tight timetable to mobilize the cedi equivalent of about US$1 billion from the domestic capital market to finance cocoa purchases for the 2026/27 crop season, with the delayed opening of the season increasing pressure on the Board and licensed buying companies to secure working capital.
As of mid-September, the new cocoa season had still not formally commenced, although the industry had expected it to begin around September. This has heightened the urgency of COCOBOD’s planned domestic financing programme, particularly because licensed buying companies reportedly have about GH¢4 billion in outstanding obligations awaiting settlement from COCOBOD.
The financing is expected to be raised through a new domestic funding framework centred on 270-day cedi-denominated commercial paper or commercial notes, rather than the offshore syndicated loans that traditionally financed Ghana’s annual cocoa purchases.
COCOBOD’s Deputy Chief Executive responsible for Finance and Administration, Ato Boateng, has revealed that the programme would be implemented through tranches, allowing the Board to draw funds as purchases require them and repay investors when the funds are no longer needed. Pension funds, commercial banks and major participants in the cocoa value chain are expected to be among the principal sources, with private placements also contemplated.
The structure is particularly important because COCOBOD is unlikely to need the entire US$1 billion equivalent simultaneously. About 70%of the crop is normally purchased between September and January, creating a substantial but seasonal working-capital requirement.
There is, however, an important regulatory hurdle. The Securities and Exchange Commission in July suspended new investments by fund managers in unsecured commercial paper under its previous guidelines, citing credit, liquidity and concentration risks. New issues will therefore need to comply with the applicable Ghana Stock Exchange Commercial Paper Issuance and Admission Rules or be structured in a manner acceptable to the regulator.
Whether US$1 billion is sufficient is another question. Industry estimates put the total financing requirement for the coming crop at approximately GH¢26 billion, assuming a roughly 6.0% increase in the producer price. COCOBOD has indicated that it intends to raise about half of that requirement through its new financing programme. Thus, the US$1 billion target—roughly GH¢10–11 billion at recent exchange rates—would cover a substantial portion, but not the entire crop-financing requirement.
Moreover, the Board remains highly leveraged despite a significant financial recovery. Its 2025 interest-bearing debt fell to GH¢12.3 billion from GH¢15.23 billion, while total liabilities declined to GH¢28.52 billion. COCOBOD nevertheless had only GH¢1.11 billion in cash and a current ratio of 0.80, underscoring continuing liquidity constraints.
Pricing is therefore likely to be the decisive test. The Government’s four-year bond cleared at 12% in September, while the 364-day Treasury-bill yield was about 10.1%. Given COCOBOD’s substantially higher credit and liquidity risk, investors are already reported to be demanding a higher risk premium.
A reasonable market expectation would consequently be a double-digit yield above Treasury-bill rates and potentially in the 13–16 per cent range, depending on security, guarantees, investor demand and final tenor. A materially higher rate would, however, increase COCOBOD’s financing costs and could undermine one of the principal objectives of replacing expensive offshore borrowing with domestic financing.
But several other companies are lining up to borrow from the capital market
However the Ghana Fixed Income Market is gearing up for a wave of new corporate bond issues, irrespective of the fate of COCOBOD’s impending commercial notes issuance.
The successful issue of two sets of corporate bonds on the Ghana Fixed Income Market (GFIM) on August 19 by Petrosol Platinum Energy PLC appears to have opened the floodgates for an intense wave of new corporate bond issues over the next one year.
Petrosol PLC’s five year senior unsecured notes issued at a fixed17% coupon rate and due for redemption on August 13 2031 were so highly demanded that they were oversubscribed. Alongside them the company, on the same day issued four year bonds at a fixed 16.50% coupon rate, due to be redeemed in August 2030 as part of its newly established GHc200 million note programme.
Instructively the coupon rates locked into by Petrosol are far lower than the rates secured by the companies that issued corporate bonds in 2024 and 2025, as Ghana’s yield curve has descended due to falling interest rates across the economy and the relatively low coupon rates secured by the government for its two bond issuances this year, of 12.50% and 12.00% for its March/April and its September issuances respectively. Consequently, Petrosol’s new corporate paper issued in 2026 successfully locked in much tighter pricing around 16.5% – 17.0% whereas the bond issuances between January 2024 and August 2025, by Kasapreko, Izwe Savings and Loans, Bayport Financial Services and Letshego PLC all clustered between 26% and 20%.
Several prominent entities in Ghana have already declared plans or established structured programmes to raise capital through the GFIM corporate debt securities pipeline between late September 2026 and the end of 2027.
First though will be Petrosol Platinum Energy PLC again. Following the successful, oversubscribed launch of its first GHc100 million corporate bond in late August 2026, the company has already started executing a GHc200 million note programme. The remaining tranches of this program are structured to be listed through late 2026 and into 2027 to continue funding its retail network expansion and working capital.
Backed by a structural initiative from the State Interests and Governance Authority (SIGA) and the Ghana Stock Exchange, a selected pipeline of state companies in the infrastructure and technology sectors are also actively preparing debt and equity instruments scheduled for rollout across the 2026–2027 horizon.
As well as all this, the already approved, multi-tranche corporate bond programmes of the aforementioned three savings and loans firms are positioned to tap the market for subsequent tranches through 2027 as macro interest rates stabilize.
Importantly, while sovereign debt traditionally dominates the market, the Ghana Stock Exchange is aggressively pushing private corporations to absorb liquidity from the country’s GHc120 billion pension fund asset pool. The GSE wants the energy and downstream petroleum sector to use rolling tranches under GHc200 million programmes to finance retail expansion and cash-based procurement and the savings and loans industry to use periodic tranche rollouts on existing three –to-five year facility lines to finance consumer credit liquidity and microfinance funding.
Coupon rates and actual yields have fallen dramatically for corporate bonds over the past year and this has been accompanied by a sharp compression in the interest rate premium demanded by bond investors, for corporate bonds over government issues. Petrosol’s bonds issued in August 2026 now offer yields between 450 and 500 basis points (bps) above the 12% coupon rate on government’s latest four year bond issuance. This compares favourably against the net yield premium over the latest sovereign bond on the earlier bonds issued by Bayport (1,175 bps), Ishwe (1,150 bps) and Letshego (950bps) respectively.
Besides all this companies are being encouraged to issue listed bonds to meet their medium term financing needs, not just because medium term commercial bank debt financing is hard to come by (because of the perceived high credit risks and a dearth of medium term customer deposits) but because even where it is available it is far more expensive than bond financing at present.
While the Ghana Reference Rate (GRR) stands at 10.18% currently, this only acts as the foundational variable baseline and so commercial banks layer operational costs, profit margins, and specific risk premiums onto it. Indeed, the final commercial bank lending rates for mid-tier corporate borrowers typically range between 22.75% and 31.00% although top-tier institutional names might unlock prime rates closer to 18.50% – 21.00%.
Therefore, by executing structured medium term note programmess on the GFIM, blue-chip corporations achieve massive structural cost savings relative to traditional banking credit lines:
For instance locking in a 16.50% – 17.00% bond yield allows Petrosolto avoid paying bank loan risk premiums. This strategy yields direct interest cost savings of 150 to 500 basis points compared to prime bank commercial credit lines.
The attractions of corporate bond financing in Ghana is now so enticing that several companies are now preparing to join the band wagon too.
