The Ghana Cocoa Board (COCOBOD) has ordered Licensed Buying Companies (LBCs) to stop purchasing cocoa beans from farmers on credit, warning that any company that violates the directive again could lose its licence.

COCOBOD Chief Executive Officer Dr Randy Abbey disclosed this at the launch of the Chamber of Cocoa Marketers, where he outlined measures being introduced to improve the financing and efficiency of cocoa purchases.

According to Dr Abbey, the regulator has already formally communicated the directive to all LBCs.

He said the restriction is intended to prevent farmers from being left waiting for payment and to improve the speed at which cocoa moves through the purchasing system.

Dr Abbey said LBCs had been reminded that buying cocoa on credit contravenes the conditions under which they operate.

“We have met as part of our stakeholder engagements, I have told them you are not supposed to buy cocoa on credit from farmers. We have all decided that we will go and sin no more,” he said.

He warned that although COCOBOD is not currently withdrawing licences over previous breaches, any repeat of the practice could result in sanctions.

“We have written to the effect that if it happens again, your licence will be revoked because it is against the terms of your licence,” Dr Abbey said.

He also urged farmers not to hand over their cocoa beans to purchasing clerks without receiving the appropriate payment.

The directive comes ahead of changes to the financing arrangements for cocoa purchases, which COCOBOD says are intended to ensure LBCs have adequate funds to operate throughout the year.

Dr Abbey said the new financing model is expected to come into effect from the 2026/27 cocoa season.

The system is designed to address delays in payments to LBCs after they take over cocoa from farmers, a problem he said has affected the sector since 2020.

“The new funding model is to ensure sufficient liquidity for cocoa purchases and related operations all year round,” he said.

He added that faster payment cycles would allow LBCs to increase their purchases, reduce their exposure to bank debt and improve the profitability of cocoa marketing.

COCOBOD also expects the financing reforms to support increased domestic processing and value addition.

Dr Abbey explained that under the previous financing structure, a significant portion of Ghana’s cocoa crop had to be used as collateral to secure financing, creating difficulties for local processors seeking access to raw cocoa beans.

The new arrangement, he said, is expected to improve liquidity for procurement while supporting efforts to retain more value from cocoa production within Ghana.

The reforms are contained in the new Ghana Cocoa Board Bill 2026, which Dr Abbey said introduces significant changes to the management and financing of the cocoa sector.

He said the legislation guarantees cocoa farmers 70% of the gross Free On Board (FOB) value of cocoa while allowing producer prices to be reviewed during the season based on market conditions.

Dr Abbey described the reforms as a major restructuring of the cocoa industry, saying they are intended to improve the financial sustainability of the sector and deliver better returns to farmers and other stakeholders.

“These measures and the new bill constitute the most significant reforms to our industry since 1984,” he said.

According to him, the changes mark an attempt to move the cocoa sector towards greater efficiency, value addition and industrialisation.

The reforms, he added, are expected to provide a more sustainable financial foundation for Ghana’s cocoa industry while improving the relationship between farmers, LBCs and other players across the value chain.