The Ghana Cocoa Board (COCOBOD) has announced that it will not secure a syndicated loan to finance cocoa purchases for the 2025/2026 crop season, citing a global shortage of cocoa beans as the key reason.
Speaking on Citi FM on Monday, August 4, Jerome Kwaku Sam, Head of Public Affairs at COCOBOD, explained that the decision to avoid syndicated financing, traditionally used to support annual cocoa purchases, was made in light of current market realities.
“We’re not doing syndication. To be very honest, last year, 2024, we didn’t do syndication, and this year, 2025, we’re not doing syndication,” he said.
Global Cocoa Shortage Driving the Decision
According to Mr. Sam, the ongoing global shortage of cocoa beans has made the use of syndicated loans less relevant. The limited availability of cocoa, he said, significantly reduces the need for large-scale financing to purchase beans that are increasingly scarce.
“What has necessitated us not to do syndication is that we’re experiencing a global shortage of the cocoa bean,” he stated.
The global cocoa shortage, driven by adverse weather conditions, disease outbreaks, and reduced yields in major producing countries, has disrupted supply chains and sent cocoa prices soaring worldwide.
Cost-Saving Strategy in Tough Times
Mr. Sam further noted that avoiding syndicated loans is also a deliberate move to cut operational costs. “We’re not doing syndication whereby we’re going to incur additional expenses and what have you. That is out of the system or table for now,” he stressed.
In recent years, COCOBOD’s syndicated loans, often running into billions of dollars, have attracted scrutiny for their high interest rates and repayment obligations, adding pressure on Ghana’s public finances.
New Producer Price Announcement Imminent
COCOBOD’s announcement follows a recent update from Finance Minister Dr. Cassiel Ato Forson on a new producer price for cocoa, a key policy change aimed at cushioning local farmers against global shocks.
The price review is expected to reflect current market dynamics, including the global shortage and increased cost of production.
Background: What is a Syndicated Loan?
A syndicated loan is a financing arrangement where a group of lenders jointly provides large-scale funding, usually for significant purchases or investments. Ghana has historically relied on such loans to pre-finance the annual purchase of cocoa beans, one of its major export commodities.
The decision by COCOBOD to abandon syndicated financing for the second consecutive year marks a significant policy shift in Ghana’s cocoa sector. While the global cocoa shortage continues to challenge supply chains, the move may also help COCOBOD reduce debt exposure and improve operational efficiency in the long term.
