The International Monetary Fund has called for comprehensive reforms in Ghana’s cocoa sector to strengthen the financial position of the Ghana Cocoa Board (Cocobod), improve producer pricing and reduce the fiscal risks associated with the sector.
The call follows a sharp deterioration in Cocobod’s liquidity position during the 2025/26 cocoa season after global cocoa prices fell significantly.
The IMF said cocoa prices dropped from about US$8,800 per metric tonne at the beginning of the season in August 2025 to approximately US$2,800 per metric tonne by the end of February 2026.
The decline sharply reduced export proceeds while Ghana’s farmgate price remained relatively high.
The farmgate price had been set at about US$5,000, equivalent to GH¢58,000 per metric tonne, representing 70 percent of the September 2025 free-on-board price.
According to the IMF, the gap between domestic producer prices and global market conditions made Ghanaian cocoa less competitive.
It reduced buyers’ willingness to lift contracted cocoa volumes, contributed to a buildup of unsold stocks and severely weakened Cocobod’s cashflow.
“Cocobod came under acute liquidity pressures during the 2025/26 season,” the IMF said.
The Fund noted that the crisis exposed structural weaknesses in the cocoa financing model and increased the financial risks facing the government.
In response, the authorities adopted a package of measures in February 2026 aimed at stabilising Cocobod and repairing its balance sheet.
The measures included the clearance of GH¢3.62 billion in arrears owed to cocoa farmers and the restructuring of about GH¢3.7 billion in Cocobod’s legacy debt.
The government also moved to transfer GH¢4.35 billion in cocoa road liabilities to the central government’s balance sheet.
Another major measure was a reduction in the 2025/26 farmgate price from GH¢58,000 to GH¢41,392 per metric tonne.
The revised price represented 90 percent of the prevailing free-on-board price and was intended to bring producer prices closer to international market conditions while preserving Cocobod’s financial stability.
The IMF said the authorities had also announced a series of structural reforms intended to prevent a recurrence of the financial pressures.
These include the introduction of an automatic farmgate price-setting formula, the issuance of domestic cocoa bonds beginning in the 2026/27 season, expansion of local cocoa processing and the discontinuation of quasi-fiscal activities.
The Fund said the cocoa sector required deeper reforms because Cocobod had struggled to achieve profitability in recent years.
The challenges have included above-market payments to farmers, high spending on inputs such as fertilisers and pesticides, elevated operational costs, volatile global cocoa prices, declining production and significant debt-service obligations.
The IMF warned that these pressures could continue to undermine Cocobod’s liquidity position if reforms are not implemented decisively.
“The cocoa sector requires comprehensive reforms to contain fiscal risks and maintain competitiveness,” the Fund said.
It identified stronger governance, improved producer-pricing mechanisms and greater transparency in financing arrangements as critical to reducing contingent liabilities and supporting the sector’s long-term competitiveness.
Under Ghana’s new Policy Coordination Instrument, the authorities plan to submit amendments to the Cocoa Act to Parliament.
The proposed amendments are expected to improve the rules governing producer pricing, strengthen Cocobod’s governance and audit requirements, enhance debt and risk management and eliminate quasi-fiscal operations.
The reforms will also strengthen the financial oversight of Cocobod by ensuring that the Ministry of Finance participates actively in pricing decisions.
The IMF said projected cocoa expenditure should remain aligned with expected cocoa proceeds to avoid renewed liquidity pressures.
The government is also considering replacing external syndicated loans with a domestic cocoa bond-based revolving fund.
Additional measures include increased domestic cocoa processing, improved traceability to meet European Union deforestation requirements and greater support for farm rehabilitation and agricultural inputs.
The authorities have also committed Cocobod to competitive tendering for the purchase of inputs, in line with wider procurement reforms.
The IMF said these measures could help restore Cocobod’s financial viability, reduce risks to the public purse and place the cocoa industry on a more sustainable footing.
However, it cautioned that implementation risks remain significant.
The Fund’s assessment suggests that Ghana’s cocoa sector remains vulnerable to further declines in international prices and production.
It therefore wants the authorities to ensure that cocoa-sector spending is adjusted when market conditions deteriorate rather than allowing new liabilities to accumulate.
The government has indicated that the Ministry of Finance will regularly review Cocobod’s funding plans and undertake contingency planning.
It has also committed to ensuring that projected expenditure does not exceed expected cocoa proceeds and that Cocobod avoids non-concessional and collateralised borrowing.
The IMF said decisive implementation of the turnaround strategy would be essential to improving Cocobod’s cashflow, limiting fiscal risks and restoring the competitiveness of Ghana’s cocoa sector.
