Food Buffer Stock seeks stronger liquidity buffer despite record profit

The National Food Buffer Stock Company (NAFCO) is seeking to bolster its liquidity position amidst a record profit before tax of GH¢91.7 million in 2025, as reported in its maiden Annual General Meeting. However, the company's short-term financial buffer remains marginal, according to CEO George Abradu-Otoo. Despite this, NAFCO's liquidity position is deemed adequate, with an Acid-Test Ratio of 1.18 in 2025, a slight improvement from 1.07 in 2024, but still below the desired threshold of 1.5 to reduce financial risks.

The CEO highlighted working capital management as a key concern that necessitates government intervention to ensure the company's financial sustainability. NAFCO's financial performance in 2025 marked a significant turnaround, reversing a loss of GH¢19.4 million in the previous year and achieving its highest profit since the company's establishment 16 years ago.

The company's gross profit margin increased from 1.61% in 2024 to 13.96% in 2025, while its return on operating assets improved from negative 63.80% to positive 26.29%. The turnaround is attributed to structural reforms, including the establishment of a Procurement Department, strengthening of the Internal Audit Department, and improvements in the Food Safety Department.

NAFCO's performance was also bolstered by reconstitution of the Board of Directors and improved collaboration between the Board, Management, and staff. The company's financial gains were accompanied by increased tax contributions to the state, reaching GH¢20.3 million. Abradu-Otoo emphasized the need for continued operational discipline, sound governance, and a stronger financial foundation to sustain progress.