COCOBOD threatens to withdraw LBC licences over cocoa purchases on credit

The Ghana Cocoa Board (COCOBOD) has issued a stern warning to Licensed Buying Companies (LBCs) regarding the purchase of cocoa beans from farmers on credit. COCOBOD's Chief Executive Officer, Dr Randy Abbey, stated that the directive aims to enhance liquidity in the cocoa purchasing system and ensure farmers receive their payments promptly.

The regulator has formally communicated this policy to LBCs and emphasized that farmers should not hand over their cocoa beans without receiving payment. Abbey explained that the restriction is necessary as delays in financing have hindered LBCs' ability to purchase cocoa efficiently, resulting in some companies being heavily indebted to financial institutions.

He emphasized that the arrangement aims to reduce the turnaround time for LBCs, eliminate their debts to banks, and improve the efficiency and profitability of cocoa purchases. While COCOBOD has not immediately withdrawn any licences due to past breaches, future disregard for the directive could lead to sanctions, including the revocation of licences.

Abbey urged both LBCs and farmers to comply with the new directive. The move is part of broader reforms under the Ghana Cocoa Board Bill 2026, guaranteeing farmers 70% of the gross Free On Board value and allowing for price reviews during the season based on market developments. These reforms, Abbey said, are among the most significant since 1984, aiming to reset the cocoa sector for growth and industrialization.