Cocoa Chamber calls for stronger collaboration, reforms to boost sector

Ghana's cocoa sector is poised for growth following the transformation of the Licensed Cocoa Buyers Association of Ghana (LICOBAG) into the Chamber of Cocoa Marketers. The newly formed chamber is urging for enhanced collaboration, better access to finance, increased local processing, and responsible governance to bolster the industry. Samuel Adomado, the Acting President of the Chamber, stated that this transition marks a significant milestone, positioning the institution as a standards-driven and policy-influential body capable of driving reforms across the entire cocoa value chain. The chamber's launch in Accra brought together key stakeholders, including licensed buying companies and financial institutions.

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Licensed buying companies recognised the need for a common platform to engage the industry regulator and address operational challenges, despite competing in the market.

Adomado highlighted the historical need for a common platform, noting LICOBAG's establishment after the liberalization of Ghana's internal cocoa marketing sector in the early 1990s. He recalled intensified activities during the 2003/2004 cocoa season due to the "purple beans" problem, which disrupted procurement. Changes in financing, pricing, taxation, and production, alongside a new Cocoa Bill, have significantly altered the industry's dynamics, underscoring the need for the chamber's coordinated approach.

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changes in cocoa financing, pricing, taxation and production, together with the enactment of a new Cocoa Bill, had altered the industry’s dynamics.

Randy Abbey, CEO of the Ghana Cocoa Board (COCOBOD), emphasized the necessity of reforms in Ghana's cocoa financing model. He called for adequate liquidity for cocoa purchases and support for domestic processing, noting that current financing arrangements with extensive collateral hinder local processors. COCOBOD is introducing a new funding model to ensure year-round liquidity for cocoa purchases and boost local processor participation. Abbey also announced a new financing mechanism, expected to be the largest domestic bond in Ghana, aimed at reducing payment delays to buying companies and improving efficiency.

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The existing financing arrangements, which required extensive collateral, made it difficult for local cocoa processors to expand and did not recognise contracts with local processing companies.

Furthermore, Abbey advocated for a revised cocoa pricing mechanism that would allow producer prices to reflect international market conditions. This would enable farmers and stakeholders to benefit from higher global prices while mitigating the impact of market downturns. COCOBOD's initiatives aim to create a more stable and profitable environment for Ghana's vital cocoa industry.

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farmers and other stakeholders to benefit from higher international prices while sharing the impact of market declines.