Cocoa Crisis: Ghana & Côte d'Ivoire Forge Alliance to Save Farmer Livelihoods

In February 2026, the Government of Ghana announced a comprehensive package of reforms to its cocoa sector, strategically designed to restore financial discipline, secure long-term viability, and guarantee fair prices for its more than 800,000 farming households. These decisive actions followed an emergency Cabinet session convened to address historical and systemic problems that had plagued the sector for many years. The reforms are aimed at transforming an industry that anchors a significant share of national foreign exchange earnings and supplies a global confectionery market worth tens of billions of dollars. The question facing Ghana was whether the existing instruments and structures, which had served the sector for half a century, remained adequate for the future market. The honest assessment concluded they did not, necessitating a deliberate reordering of the sector around farmer livelihoods and institutional financial sustainability.

The urgent need for reform became undeniable when the world market price of cocoa peaked at over US$12,000 per metric tonne in late 2024, only to fall sharply below US$5,000 per metric tonne. This volatility rendered Ghana’s beans uncompetitive and severely starved COCOBOD, the Ghana Cocoa Board, of the necessary liquidity to pay farmers, while its debt burden continued to escalate. This combination of collapsing prices and rising indebtedness made decisive, evidence-led reform unavoidable to sustain the industry and ensure its long-term competitiveness.

Three core pillars underpin this reform agenda. Firstly, **processing cocoa where it is grown**. For too long, the global cocoa trade structure has disproportionately rewarded those who process beans over those who grow them, leading to the bulk of value chain margins accruing outside Ghana despite its premium quality cocoa. To address this, Cabinet has mandated that, from the 2026/27 crop season, a minimum of 50 percent of national cocoa production must be processed locally. This initiative signifies an economic transformation, aiming to shift Ghana from a raw commodity supplier to a producer of higher-margin semi-finished cocoa derivatives. The state-owned Cocoa Processing Company (CPC) is being revived as a priority to lead this effort, with domestic processors expressing both capacity and willingness to meet the 50 percent target. This move is expected to build manufacturing depth, develop skilled employment, retain more value within local communities, and position Ghana as both a premium cocoa origin and a credible processor. Regulatory tailwinds, such as Ghana’s qualification as a low-risk origin under the European Union Deforestation Regulation (EUDR) due to 95 percent of its farms being mapped, further reinforce the competitive advantage of Ghanaian-processed cocoa in tightening international markets.

Secondly, **a pricing framework that reflects the market**. This is the most significant change for farmers, transitioning to a transparent, market-responsive pricing model. Previously, the producer price was fixed at the start of the season, with COCOBOD absorbing market volatility, a burden that proved unsustainable as prices swung violently. The new COCOBOD Bill will establish an automatic adjustment mechanism for the producer price, aligning it with movements in world market prices, exchange rates, and other key variables, while guaranteeing farmers a minimum of 70 percent of the gross Free-On-Board (FOB) price. This ensures farmer income moves transparently with world market realities, with a floor preventing it from falling below a fair share of the crop's value. This livelihood guarantee is crucial in an increasingly volatile global cocoa market, protecting farmers, sustaining productivity, and reinforcing institutional trust.

Thirdly, **a financing architecture built for resilience**. For 32 years, Ghana relied on offshore syndicated loan facilities, which carried foreign exchange exposure, concentrated counterparty risk, and tied liquidity to international lending conditions. This model, and a subsequent unsustainable stop-gap prefinancing arrangement, are being replaced by a domestic cedi-denominated Cocoa Bond program. Designed to raise approximately US$1 billion from a range of investor categories, the proceeds will be exclusively dedicated to cocoa purchases, establishing a revolving fund for COCOBOD. This secures reliable, ring-fenced liquidity for prompt and full farmer payments. The program channels local liquidity into an export-backed productive sector, eliminates dollar-denominated borrowing risk, and allows issuance to be staggered with the crop cycle. It will also revive indigenous Licensed Buying Companies (LBCs), restoring the state-owned Produce Buying Company to full operations as the leading LBC, thereby fostering a more resilient cocoa economy, less exposed to external shocks.

These reforms are further reinforced by a decisive restructuring of COCOBOD’s balance sheet, including the conversion of approximately GH¢5 billion in legacy debts owed to the Ministry of Finance and the Bank of Ghana into equity. Additionally, GH¢4.35 billion in cocoa roads liabilities are being transferred to the Ministry of Roads and Highways, alongside forensic audits, criminal investigations, and a firm prohibition on the quasi-fiscal expenditures that drained the organization for years. These measures collectively underscore a conviction that the durability of Ghana’s cocoa sector depends on institutional foresight and the courage to make uncomfortable but necessary decisions.

In parallel with these internal reforms, Ghana's Finance Minister, Dr. Cassiel Ato Forson, has consistently called for stronger collaboration between Ghana and Côte d’Ivoire through the Côte d’Ivoire–Ghana Cocoa Initiative (CIGCI). Speaking at the 7th Ordinary Meeting of the Steering Committee in Abidjan, Dr. Forson, who chaired the meeting, emphasized the critical importance of sustained engagement and deeper cooperation between the world's two largest cocoa-producing nations. He stressed that such collaboration is essential to safeguarding their economies, anticipating challenges, mitigating shocks, and proactively shaping the future of the global cocoa industry, rather than merely reacting to disruptions.

Dr. Forson reiterated that the partnership must succeed to secure the long-term sustainability of the cocoa sector and improve the livelihoods of millions of farmers. He underscored the need to transform the cocoa sector into one that is more resilient, prosperous, and profitable for both countries and their farmers. The Finance Minister urged stakeholders to focus on practical solutions and concrete actions that would produce tangible benefits for cocoa farmers and support the growth of the sector. Côte d’Ivoire’s Minister of Agriculture, Rural Development and Food Production, Bruno Nabagné Koné, echoed these sentiments, highlighting the importance of collective action in tackling sector challenges and guaranteeing decent incomes for farmers through closer coordination and greater harmonisation of cocoa pricing policies. The meeting, which also included the Chief Executive of the Ghana Cocoa Board (COCOBOD), Dr. Randy Abbey, emphasized a shared responsibility to advance farmer interests and ensure the industry's continued viability. Presidents John Dramani Mahama of Ghana and Alassane Ouattara of Côte d’Ivoire are expected to hold a high-level meeting to reaffirm this strategic partnership.

These comprehensive reforms and strong international collaborations represent bold leadership and a decisive commitment to building a future-focused cocoa industry. They secure Ghana’s value, strengthen local capacity, and position the sector for sustainable growth, ultimately aiming to ensure greater value for the farmer, processor, financier, policymaker, and the nation as a whole.