The Ghana Cocoa Board (COCOBOD) faced a historic financial challenge by the end of 2024, with negative equity of 3.8 billion Ghana cedis, Chief Executive Officer Dr Randy Abbey has revealed.
Speaking on The Point of View on Channel One TV, Dr Abbey explained that the organization had total debt of 32.9 billion cedis at the end of 2024, marking a significant turnaround from the positive equity of 1.8 billion cedis at the end of 2016.
He stated that at year end 2024, COCOBOD had a debt of 32.9 billion cedis and negative equity of 3.8 billion cedis, which presupposes that the organization’s liabilities were more than its assets by close to four billion cedis. He added that this was the first time in the history of the 79-year-old company that it had recorded negative equity.
The CEO noted that negative equity reflected a situation where liabilities exceeded assets, a development he described as unprecedented in COCOBOD’s history since its establishment.
Dr Abbey also cited significant exposure from cocoa road contracts amounting to 26 billion cedis. He clarified that only 4.4 billion cedis of this exposure was part of the recorded debt.
He stated that COCOBOD inherited a cocoa road exposure of 26 billion cedis, with the recorded debt reflecting only a portion of the total commitment to road infrastructure projects.
The CEO further noted recurring procurement inefficiencies in COCOBOD, particularly in the purchase of jute sacks used for cocoa packaging. He revealed that COCOBOD kept procuring jute sacks every single year without clearing previous inventory, spending 48 million United States dollars annually on these purchases.
Dr Abbey stated that the organization had a situation where it continued procuring jute sacks annually without clearing existing stock, leading to wasteful expenditure.
The revelations come as COCOBOD faces mounting pressure to settle outstanding payments to cocoa farmers and Licensed Buying Companies (LBCs). The Minority Caucus in Parliament has called on the government to immediately settle more than 10 billion cedis owed to farmers and LBCs.
In response to the crisis, COCOBOD has been working with the Ministry of Finance to find urgent solutions to the liquidity challenges facing the sector. The organization has also announced plans to permanently abandon the decades-old syndicated loan system that had financed cocoa purchases for approximately 32 years.
The financial difficulties have been compounded by the collapse of international financing arrangements, falling global cocoa prices relative to Ghana’s farmgate price, and legacy debt accumulated over several years.
COCOBOD has successfully sold over 530,000 tonnes of cocoa for the current season, but approximately 50,000 tonnes remain unsold due to Ghana’s farmgate price becoming commercially uncompetitive compared to other producing countries.
The board has also revealed that it defaulted on forward sales contracts during the 2023/2024 season after failing to deliver all 333,760 tonnes of cocoa under contracts signed at 2,600 dollars per tonne, sending negative signals to international markets.
Dr Abbey has announced that the long-awaited COCOBOD Bill will be laid before Parliament to review cocoa prices and make them more competitive on the global market.
