The Acting Chief Executive Officer of the Ghana Cocoa Board (Cocobod), Dr. Randy Anerley Abbey, has warned that indigenous Licensed Buying Companies (LBCs) face possible extinction unless urgent financial support is provided.
Dr. Abbey disclosed that Cocobod has not secured a syndicated loan for the 2025/2026 crop season—a decision that has triggered a financing crisis for local cocoa buyers.
“Something is happening with the LBCs, especially the indigenous ones, which has to do with the fact that we are not doing the syndicated loan. We are not doing 2025/26,” he told George Wiafe on Joy News’ PM Express Business Edition.
He explained that the absence of the annual syndicated loan has created a liquidity vacuum, particularly for local companies that traditionally depend on Cocobod’s seed money to purchase cocoa beans during the harvest season.
“Under the syndicated loan, Cocobod creates what we call the seed money. And this seed money is what is given to the LBCs to go and purchase the beans,” he said.
“But 2024/25, low syndicated loans—so no seed fund.”
Dr. Abbey noted that while avoiding the syndicated loan may save Cocobod some financing costs, the move is having devastating consequences for smaller, local players.
“Although it is saving Cocobod in terms of the financing cost… if we were to go for a syndicated loan, Cocobod would be looking at maybe GH¢3 billion or GH¢3.5 billion. And because of the nature of our finances, you even have banks asking for 8% to 10% on $1,” he explained.
The impact, he warned, is already being felt across the cocoa purchasing chain.
“Now the indigenous LBCs are unable to operate because there’s no seed money.”
In response to the looming crisis, Cocobod has engaged the Bank of Ghana for a possible policy intervention using the Cash Reserve Ratio.
“One of the things we’ve done is to engage the central bank, and they asked for a follow-up letter. I’ve done that,” he revealed.
Dr. Abbey proposed that a small portion of the mandatory reserves banks hold with the central bank—currently 25% of customer deposits—could be allocated to support indigenous cocoa buyers.
“What I then told the central bank was that, look, you have the Cash Reserve Ratio, where all the banks put 25% of their deposits at the central bank. This is idle, not doing anything,” he said.
“Can we look at apportioning 2% or 3% of this Cash Reserve Ratio just to support indigenous LBCs?”
He further suggested that any such funds be ring-fenced exclusively for cocoa purchases.
“We can restrict it to cocoa purchases, just to ensure that they also don’t go using it for oil, tin tomatoes, and all those things.”
Dr. Abbey expressed hope that a positive response from the central bank would provide a lifeline to struggling local cocoa buying firms, whose survival is now in doubt.
“We believe that if there’s a positive response, it will be able to help, especially the indigenous LBCs. Otherwise, if we continue with this financing model, I fear that most of them might go extinct.”
His comments come as Cocobod shifts from the syndicated loan system to a 60-40 financing model with international buyers for the 2025/26 season—a change that, he noted, compelled him to travel to Europe and North America to engage buyers directly.
ALSO READ: