COCOBOD’S GH¢16.3bn SPV: Real progress toward a sustainable cocoa sector

Ghana's cocoa sector is poised for a new era in financing, with the launch of Cocoa Capital PLC and the commencement of the GH¢16.3 billion Domestic Cocoa Notes Programme. The program's two main components, a GH¢14 billion commercial paper for short-term liquidity and GH¢2.3 billion in medium-to-long-term bonds for legacy debt refinancing, represent a significant shift in financing structures.

This development indicates a move towards a more structured approach where domestic banks, securities firms, institutional investors, and the capital market can play a more significant role in financing one of Ghana's most important export sectors. The structure of Cocoa Capital PLC, as a dedicated special-purpose vehicle, allows for greater clarity in the funding's purpose, the repayment obligations, and the responsibilities of the various participants.

This has the potential to strengthen domestic financial intermediation and establish a better link between domestic savings and financing for the productive sectors. The programme's ability to mobilize domestic capital is particularly noteworthy, as it could help broaden the range of productive-sector instruments for domestic investors and contribute to the country's export growth, employment, and foreign-exchange earnings.

With the Securities and Exchange Commission's approval to raise funds through Ghana's domestic debt capital market, this initiative could also enhance investor confidence by linking repayment obligations to receivables from executed cocoa forward-sale contracts.