Cocoa Crisis to Comeback: Inside Ghana’s Bold Turnaround

Cocoa Crisis to Comeback: Inside Ghana’s Bold Turnaround

Ghana, the world’s second-largest cocoa producer, is undergoing major transformations in its cocoa industry. From record-setting farmgate prices to COCOBOD’s first profit in years, and a shift away from syndicated loans to bold structural reforms, the sector is in flux. Here’s a breakdown of the latest developments and their implications.

Recent News: COCOBOD Turns Profitable, Ends 30-Year Loan Tradition

After six years of losses, the Ghana Cocoa Board (COCOBOD) posted a profit of GHS 2.3 billion in the 2022/23 season. This milestone followed the government’s debt restructuring initiative, which replaced short-term cocoa bills with long-term bonds, easing interest burdens.

In a surprising move, COCOBOD also announced it would not take its annual syndicated loan in 2024/25 — a first since 1992. Instead, Ghana will self-finance cocoa purchases, relying on local funding and pre-payments from buyers. This bold decision saves an estimated $150 million in interest.

Meanwhile, President-elect John Mahama has pledged sweeping reforms to COCOBOD, proposing to separate its regulatory duties from trading functions and give farmers more direct control over sales. With his party’s parliamentary backing, the stage is set for major changes.

Economic Impact: Output Down, Exports Struggling

Despite the good news on profits, cocoa production is down sharply. Ghana produced just over 500,000 tonnes in the 2023/24 season — nearly half its 2020/21 output. Harsh weather, crop disease, and smuggling all contributed to this slump.

Cocoa export revenue fell to $1.7 billion in 2024, the lowest in 15 years. This drop strained Ghana’s trade balance, reduced foreign exchange inflows, and added pressure to the cedi. With cocoa being one of Ghana’s top exports, the decline poses risks to economic stability.

COCOBOD’s heavy debt load also led to liquidity challenges. To address this, the government’s debt exchange converted high-interest cocoa bills into longer-term instruments. This helped COCOBOD avoid financial collapse but also highlights the sector’s underlying vulnerabilities.

Cocoa Pricing: Record Farmgate Rates Amid Global Volatility

Globally, cocoa prices surged in 2024 due to supply shortages in West Africa. Futures rose over 150% year-on-year before retreating slightly in early 2025. Despite this, Ghana missed out on some gains due to its forward-selling strategy.

Domestically, the government responded by hiking cocoa prices to record highs. The farmgate price jumped from GHS 12,800 to GHS 49,600 per tonne — a 129% increase in just one year. These increases aimed to curb smuggling and ensure farmers get a fairer share of market value.

Still, inflation and currency devaluation continue to challenge farmer earnings in real terms. As a result, some farmers began holding onto their beans, hoping for even higher prices.

A Sector in Transition

Ghana’s cocoa sector is at a crossroads. While recent policies have sparked optimism — from pricing reforms to debt reduction — deep structural issues remain. If Mahama’s proposed COCOBOD reforms are implemented, the industry could become more transparent and farmer-focused.

Whether these shifts translate into long-term gains will depend on execution, global market trends, and how well Ghana balances policy reform with economic realities. One thing’s clear: cocoa remains at the heart of Ghana’s economic conversation.