Addis Ababa: Ghana to end foreign funding for cocoa purchases – Mahama

President John Dramani Mahama has announced plans to stop foreign borrowing to finance Ghana’s cocoa purchases.

This is a major shift in the country’s commodity financing model.

Addressing participants in Addis Ababa ahead of the African Union summit, Mr Mahama said Ghana would instead rely on domestic bonds to fund the purchase of cocoa beans from farmers.

“We are going to stop foreign funding for the purchase of our cocoa,” he declared. “We are going to raise domestic bonds. We have enough seedlings in Ghana to pay for our cocoa.”

He explained that under the new direction, Ghana would no longer collateralize cocoa beans to secure external financing.

“We are going to raise domestic bonds, buy our own cocoa. We don’t need to collateralize the beans,” he said.

The President argued that the existing collateralized system restricts Ghana’s ability to allocate beans to local processors, despite having significant installed capacity within the country.

“I know the interesting part, we have the capacity to process 400,000 tons of those beans,” he stated. “But because the beans are collateralized, we cannot even allocate those beans to the local processors. We have to ship all the beans outside.”

According to him, purchasing cocoa independently would allow Ghana to channel substantial volumes into domestic processing to add value and create jobs.

“Now if we buy the beans ourselves, we can take 400,000 tons out of the beans and give to our local processors to add value,” he said.

Mr Mahama linked the policy shift to broader economic transformation goals, insisting that value addition across sectors is critical to job creation and youth empowerment.

“Our young people are not as patient as our generation. They want to see that progress and prosperity today,” he noted.

He maintained that strengthening domestic financing and processing capacity would support long-term prosperity.

“Africa’s prosperity is not a threat to anybody in this world. Africa’s prosperity will consolidate world prosperity, and it will be a positive for this world, not a threat,” he added.

The proposed move marks one of the clearest signals yet of a push toward greater financial independence and industrial value addition within Ghana’s cocoa sector.

The cocoa sector in Ghana is currently undergoing a severe financial crisis characterized by a “meltdown” of its traditional funding model, massive debt, and a significant drop in production.