Cocoa Chamber seeks reforms to boost sector growth

The Chamber of Cocoa Marketers has called for reforms in Ghana's cocoa sector, advocating for stronger collaboration, better financing, increased value addition, and responsible governance. The transition of the Licensed Cocoa Buyers Association of Ghana (LICOBAG) into the Chamber of Cocoa Marketers is seen as a significant milestone in the sector's history, according to the Chamber's Acting President, Mr Samuel Adomado.

Mr Adomado emphasized that this transition would strengthen the Ghana cocoa industry's position as a standards-driven and policy-influential body capable of driving reforms across the cocoa value chain. The Chamber's launch brought together licensed buying companies, cocoa industry stakeholders, financial institutions, and participants from the cocoa value chain.

Adomado explained that the transition marked a turning point for LICOBAG, which was formed following Ghana's internal cocoa marketing liberalization in the early 1990s. The Association's activities intensified during the 2003/2004 cocoa season due to the "purple beans" problem, which disrupted cocoa procurement and threatened licensed buying companies' operations.

The Chief Executive Officer of the Ghana Cocoa Board, Mr Randy Abbey, emphasized the need for reforms in Ghana's cocoa financing model to ensure adequate liquidity for cocoa purchases and support domestic processing. Current financing arrangements, requiring extensive collateral, have made it difficult for local cocoa processors to expand and do not recognize contracts with local processing companies.

To address this, COCOBOD is introducing a new funding model that will provide year-round liquidity for cocoa purchases and increase local processor participation. The new financing mechanism is also expected to reduce payment delays to licensed buying companies, enhance purchasing efficiency, and decrease indebtedness to banks. Abbey also called for a new cocoa pricing mechanism that would enable producer prices to respond to international cocoa prices and market conditions, benefiting farmers and stakeholders during international price increases while sharing the impact of market declines.

The Ghana Cocoa Board CEO also advocated for a legislation that would protect cocoa farms from unauthorized destruction and environmentally harmful activities. Dr Andani Alhassan, the Chamber Chairperson, welcomed the formation of the Chamber and called for stronger partnerships among licensed buying companies, farmers, COCOBOD, financial institutions, and international partners.

He stressed that cocoa remains an essential pillar of Ghana's economic development and urged stakeholders to pursue ethical trade and sustainable growth.