Amid the current challenges facing Ghana’s cocoa sector and COCOBOD, many well-meaning Ghanaians and institutions are proffering possible solutions on how to address the crisis, and the latest is the former Energy Minister and an Ex-Parliamentarian, Dr. Kwabena Donkor.
Dr. Kwabena Donkor agrees that the cocoa sector has long been a pillar of the national economy, but its foremost institution, the Ghana Cocoa Board (COCOBOD), has remained the same and archaic despite the changing dynamics.
He maintains that he has suffered years of poor management and structural inefficiency that can no longer be ignored, and hence, “bringing it down” for the necessary reforms is imperative.
In an exclusive interview with The High Street Journal, Dr. Donkor did not mince words. The problems at COCOBOD, he insists, are not recent. Central to his call for reformation is the advocacy to separate COCOBOD’s regulatory functions from its marketing function.
In his analysis, the situation has played a critical role in the persistent mismanagement spanning five to six years, leaving the institution technically insolvent.
COCOBOD’s Woes Not a One-Year Problem
Dr. Donkor describes the current crisis of COCOBOD as long-standing. The financial distress, the mounting debt, among others, were visible years ago.
However, the government and the institution itself failed to take drastic remedial measures.
He points to the board’s growing dependence on bond issuance to survive. When cocoa bonds matured, the institution reportedly struggled to redeem them, forcing it to issue new bonds to repay old ones, a cycle that raised red flags about liquidity and sustainability.
“COCOBOD has been totally and poorly managed over the years. This is not an issue of one year or two years. Over the last five or six years, some of us have been calling for reforms in the cocoa board because the cocoa board was technically bankrupt. Cocoa bonds were issued, but they couldn’t redeem the bonds. And so new bonds had to be issued,” he did not mince words.
A Behemoth in a Changing World
The persistent challenges of COCOBOD, which have rippled to the cocoa sector, he believes, are symptomatic of a deeper problem of an institution resistant to change in a rapidly evolving global commodity market.
In his view, the board has behaved like a behemoth, exploding in size but refusing to change modus operandi or adapt to the changing world.
“COCOBOD has become a behemoth. We should bring COCOBOD down,” he insisted.
He further pointed to the conflicting roles of COCOBOD, which are inimical to efficiency. He cannot fathom why the same institution regulates quality and pricing. It also licenses buyers. It markets Ghana’s cocoa internationally. It oversees production support programmes. It finances operations.
Dr. Donkor argues that this concentration of authority has made the institution too large, too complex, and too insulated from effective oversight. In his view, the combination of regulatory and commercial roles creates an inherent conflict. When the same body sets the rules and also plays in the market, accountability can become blurred.
“COCOBOD, one, is a regulator. It’s a marketer. And those two roles must be separated. Cocoa board’s role as a regulator, regulating quality, regulating pricing, etc. It’s almost like the cocoa board is self-regulating,” he indicated.
The Case for Structural Separation
The ardent subscriber to good corporate governance believes that it is imperative for the state to split the institution. He calls for a public regulatory authority that would be responsible solely for regulation, quality control, licensing, pricing frameworks, and enforcement.
The second separate commercial entity would handle marketing, production support, and trading functions.
With such a split and division of labour, he is convinced that the regulator would be independent and empowered to supervise all industry players, including the marketing arm itself. Such separation, he argues, would introduce clarity of purpose and strengthen governance.
If the regulatory body were independent, he is convinced that, among other things, it could enforce minimum working capital requirements, tie licensing to financial capacity, and ensure that Licensed Buying Companies (LBCs) and pre-financiers are paid on time.
It would also impose penalties where contractual obligations are breached.
“I sincerely believe we should bring down the cocoa board into minimum of two. Let the regulatory arm be a regulator. And let the marketing and production arm be a separate entity,” he proposed.
He added, If the regulatory function were separate, it would regulate even the financial viability of players. You must have a certain minimum working capital. You will be licenced and your licence will depend on your capacity. All players, not just LBCs. And it will have been part of its role to ensure that people who pre-finance, buyers, LBCs, and the rest, are paid on time by the marketer. If you fail, you pay a penalty.”
The Bottomline
Dr. Kwabena Donkor’s proposal is aimed at ensuring an oversight that would reduce systemic risk, improve confidence, and restore discipline across the sector.
For farmers, this could mean more predictable payments, and for buyers, greater certainty.
The cocoa sector remains strategically important to Ghana’s economic identity. Yet without structural reform, he implies, the system will continue regulating itself, with all the risks that entails.
