Banking and financial consultant Dr. Richmond Atuahene has outlined a series of strategic reforms he believes are critical to ensuring the success of the Ghana Cocoa Board’s proposed US$1 billion domestic cocoa bond programme for the 2026/2027 crop season.
While warning that the proposed financing structure carries significant risks due to COCOBOD’s huge debt burden, declining cocoa production, weak investor confidence, and market volatility, Dr. Atuahene argues that the challenges can be overcome if authorities implement some strategic reforms in addition to credible financial safeguards.
According to him, the domestic bond initiative has the potential to transform Ghana’s cocoa financing architecture by reducing dependence on foreign syndicated loans and creating a more sustainable funding model for cocoa purchases.
However, in a detailed analysis of the proposed bond copied to The High Street Journal, he stressed that success will depend largely on restoring investor confidence, improving financial discipline, and repositioning the cocoa sector for long-term value creation.
Need for Strong Institutional Backing/Underwriter
Dr. Atuahene believes one of the most important steps toward making the cocoa bond attractive to investors is securing guarantees or underwriting support from credible regional financial institutions such as African Export-Import Bank and ECOWAS Bank for Investment and Development.
According to him, backing from such institutions would provide reassurance to investors that their funds are protected even in the event of repayment difficulties. He explained that external institutional guarantees would significantly improve market confidence and reduce fears arising from COCOBOD’s past debt restructuring challenges.
Cleaning Up COCOBOD’s Balance Sheet
The financial consultant also called for urgent measures to strengthen COCOBOD’s financial position before the bond issuance. He proposed converting about GH¢5.8 billion in legacy debt into equity as part of efforts to improve the institution’s balance sheet and restore credibility with investors.
Dr. Atuahene argued that investors would be reluctant to commit long-term funds to an institution burdened with unsustainable debt unless visible financial restructuring measures are undertaken.
Transfer Non-Core Liabilities Away from COCOBOD
Another major recommendation is the removal of non-core financial obligations from COCOBOD’s books.
For instance, Dr. Atuahene specifically proposed transferring approximately GH¢4.35 billion in road infrastructure liabilities to the Ministry of Roads and Highways so that COCOBOD can focus strictly on its core mandate of cocoa production, purchasing, and marketing.
According to him, reducing operational distractions and unnecessary financial burdens would help improve efficiency and financial sustainability.
Competitive Pricing Key to Investor Appetite
Dr. Atuahene further recommended that the bonds be priced competitively to attract institutional investors.
He suggested offering yields about 200 to 400 basis points above government securities to compensate investors for perceived risks associated with the cocoa sector and COCOBOD’s recent financial difficulties.
According to him, attractive pricing would be necessary to rebuild trust and encourage strong market participation.
Transparency and Financial Discipline Critical
The banking consultant stressed that transparency and sound financial reporting would be central to the success of the programme.
He called for rigorous disclosure standards and improved accountability mechanisms following the restructuring of cocoa bills in 2023, which weakened confidence in COCOBOD’s financial management.
Dr. Atuahene said investors need clear evidence that the institution can manage funds prudently and meet repayment obligations without future restructuring.
Linking the Bond to Local Processing
Dr. Atuahene also proposed aligning the cocoa bond programme with government’s industrialisation agenda by supporting local cocoa processing.
He backed efforts to process at least 50% of Ghana’s cocoa locally, arguing that value addition would increase export earnings, create jobs, and strengthen the long-term repayment capacity of the cocoa sector.
According to him, relying solely on raw bean exports leaves the industry vulnerable to global price shocks and weakens revenue sustainability.
Reviving Indigenous Buying Companies
The financial expert further called for the revival of the Produce Buying Company (PBC) and stronger support for indigenous Licensed Buying Companies (LBCs).
He explained that empowering local buying firms would improve cocoa purchasing efficiency, strengthen local participation in the value chain, and ensure smoother operations during the crop season.
According to him, the collapse of many indigenous buying companies under the previous financing system weakened the sector’s operational resilience.
Managing Price Volatility More Sustainably
Dr. Atuahene warned against continued dependence on rollover contracts and unstable forward sales arrangements that previously created major financial losses for COCOBOD.
He urged authorities to develop a more sustainable financing framework capable of withstanding fluctuations in global cocoa prices. According to him, prudent risk management mechanisms will be essential to protecting the bond programme from future market shocks.
Protecting Farmers While Maintaining Financial Stability
The consultant also emphasized the need to maintain competitive and sustainable producer prices for cocoa farmers.
He urged the Producer Price Review Committee (PPRC) to strike a balance between ensuring fair returns to farmers and protecting COCOBOD’s financial stability.
Dr. Atuahene noted that stable and attractive producer prices are necessary to encourage production growth, especially at a time when illegal mining, disease, and climate-related challenges are threatening cocoa output.
The Bottomline
Despite the significant risks facing the proposed domestic cocoa bond programme, Dr. Atuahene believes the initiative could become a turning point for Ghana’s cocoa sector if backed by strong governance reforms, financial discipline, transparency, and strategic industrial policies.
