The Chamber of Cocoa Marketers Ghana has warned that delays in payments by the Ghana Cocoa Board (COCOBOD) to licensed cocoa buying companies could undermine their ability to finance purchases from farmers if the outstanding obligations are not settled promptly.
Speaking to the press, Chief Executive Officer of the Chamber, Victus Dzah, said the estimated GH¢4 billion owed to cocoa buyers was putting significant pressure on their operations, particularly their ability to service bank facilities used to finance cocoa purchases.
Mr Dzah said licensed buying companies typically rely on borrowed funds to purchase cocoa from farmers and subsequently expect timely payments from COCOBOD to repay their financiers and secure fresh credit.
“If they are able to pay us, at least we can use those monies to start with, and then we can pay our bankers, and then our bankers can also open new lines of credit for us to go to the field and buy cocoa from the farmers,” he said.
He cautioned that prolonged delays could make it difficult for buying companies to return to the field to purchase cocoa during the new season.
“But if they don’t pay us, how are we going to pay our bankers? We are not financial [institutions]; we can’t go to the field,” Mr Dzah said.
He further raised concerns about the financing arrangements for the cocoa sector, saying the availability and timely disbursement of funds would be critical to maintaining the flow of cocoa purchases from farmers.
“If this bond thing doesn’t work, whereby cocoa bond has money referenced to farmers, buy cocoa from farmers, deliver, and they sell, pay us quickly, for us also to go back, it is not worth it going to the field to buy cocoa at all,” he said.
The concerns come after described the reported outstanding payments as a normal occurrence following the end of a cocoa season.
However, Speaking on Accra-based Citi FM on Tuesday, September 15, COCOBOD’s Head of Public Affairs, Jerome Kwaku Sam, said it was reasonable for COCOBOD to have outstanding obligations to licensed buying companies about a month and a half after the close of the season.
“So if the season ended just about a month and a half ago, it is only reasonable, logical, that there possibly could be some outstanding amounts that COCOBOD would have to make to the licensed buying companies or the chamber,” he said.
Mr Sam explained that licensed buying companies purchase cocoa on behalf of COCOBOD and submit Cocoa Takeover Receipts for payment.
He said the Board had prioritised payments to cocoa farmers before settling outstanding obligations to licensed buying companies.
“Our farmers as well as the licensed buying companies. So between these two stakeholders, we thought that prioritising the cocoa farmer who does the cultivation and who makes available the beans for us to give in purchase and sell ought to be prioritised,” he said.
According to Mr Sam, COCOBOD is preparing to engage the licensed buying companies to resolve outstanding payments, while the Board’s financing transition has also contributed to the situation.
“Plans are far advanced to meet with the licensed buying companies or the chamber to iron out all outstanding payments that we have,” he said.
He also maintained that outstanding balances owed to cocoa buyers were not a new development, noting that such obligations had previously been carried from one cocoa season into another.
“No, this is not new,” Mr Sam said, responding in part to a question from the interviewer.
