As Ghana’s cocoa sector grapples with one of its most challenging periods in years, the International Finance Corporation (IFC) says it has stepped in to plug a critical financing gap threatening the cocoa supply chain, injecting hundreds of millions of dollars to keep licensed buying companies and farmers afloat.
Speaking on Channel One TV’s The Point of View, IFC Senior Country Manager Kyle Kelhofer revealed that delays in COCOBOD’s expected financing transactions had left licensed buying companies (LBCs) under pressure, forcing them to self-finance operations in an already strained market.TV & Video
“Well, the big thing that we’ve been trying to support over the last 18 months, because there’s been a bit of a financing gap with the cocoa board…and the LBC supply chain has had to self-finance,” Kelhofer said.
Ghana, the world’s second-largest producer of cocoa beans, relies heavily on a tightly linked financing structure to move cocoa from farm gates to export markets. However, disruptions to that flow, combined with production challenges, have heightened liquidity stress across the value chain.
To stabilise the system, the IFC says it has worked closely with local banks, regulators, the Bank of Ghana and the Ministry of Finance to channel funding in local currency to sustain operations.
“We’ve tried to step in, including with some support from the regulators, the central bank and the Ministry of Finance. We’ve tried to step in to help the LBCs have sufficient liquidity, but local currency liquidity, hence via local banks,” he explained.
According to Kelhofer, the IFC has already provided more than $100 million, with total support potentially reaching $300 million this year, aimed at ensuring the cocoa supply chain remains functional.
“And so we’re proud to have provided over $100 million and maybe up to $300 million this year to help ensure that the whole cocoa supply chain remains viable and that farmers at the farm gate are seeing all the LBCs and getting as price competitive and the best return possible,” he said.
The intervention highlights the growing role of development finance institutions in backstopping strategically important sectors, as Ghana’s cocoa industry confronts financing constraints, production risks and broader market pressures.
Credit-citibusiness
