The Ghana Cocoa Board (COCOBOD) has warned Licensed Buying Companies (LBCs) against purchasing cocoa beans from farmers on credit, with repeat offenders facing possible loss of their operating licences.
COCOBOD Chief Executive Officer, Dr Randy Abbey, said the directive is intended to improve liquidity in the cocoa purchasing system and ensure farmers receive prompt payment for their produce.
He said COCOBOD had formally communicated the directive to all LBCs and also advised farmers not to hand over their cocoa beans without receiving payment.
According to Dr Abbey, delays in financing have affected the ability of some LBCs to purchase cocoa efficiently, leaving several companies with significant debts to financial institutions.
“The arrangement is to aid the shorter turnaround time for LBCs so that it can quicken the pace of purchases, eliminate indebtedness to banks and improve the efficiency and profitability of cocoa purchases,” he said.
Speaking at the launch of the Chamber of Cocoa Marketers, Dr Abbey clarified that COCOBOD was not revoking licences over previous breaches but warned that companies that disregard the directive in future would face sanctions.
“We are not withdrawing anybody’s license. But we have written to the effect that if it happens again, your license will be revoked because it is against the terms of your license,” he said.
He also urged farmers to reject arrangements that require them to hand over their cocoa without immediate payment.
“We have also told the farmers that LBCs are not supposed to buy cocoa on credit from you. So don’t go and take your cocoa to any purchasing clerk on credit,” he added.
The directive comes ahead of the introduction of a new financing arrangement for cocoa purchases from the 2026/27 crop season.
Dr Abbey said the new model is expected to provide sufficient funding for cocoa procurement and related activities throughout the year, helping to eliminate delays in payments to LBCs.
“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round,” he said.
He added that the reforms would allow LBCs to access funds faster, reduce their dependence on bank financing and improve the efficiency and profitability of cocoa marketing.
The reforms are also expected to support local cocoa processing and value addition by improving domestic processors’ access to cocoa beans.
Dr Abbey said the changes form part of broader reforms under the Ghana Cocoa Board Bill 2026, which guarantees farmers 70% of the gross Free on Board (FOB) value and allows producer prices to be reviewed during the season based on market conditions.
“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.
“These reforms are resetting the cocoa sector for growth and industrialisation.”
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