The Ghana Cocoa Board (COCOBOD) has raised GH¢3.396 billion from domestic institutional investors through its inaugural commercial paper issuance, as the cocoa regulator moves to diversify its financing sources and reduce reliance on external borrowing.
The funds were raised through Cocoa Capital PLC, a wholly owned subsidiary of COCOBOD, under a GH¢16.3 billion Domestic Cocoa Notes Programme, comprising GH¢14 billion in commercial paper to finance cocoa purchases and GH¢2.3 billion in bonds to refinance existing cocoa-sector debt.
The inaugural issuance, known as Series 1 (Tranche 1), has been admitted to the Ghana Fixed Income Market (GFIM) of the Ghana Stock Exchange, marking a significant step in the development of a domestic financing framework for the cocoa industry.
Speaking at the official commercial paper listing ceremony, COCOBOD Chief Executive, Dr Randy Abbey, described the transaction as an important milestone in the evolution of Ghana’s cocoa financing framework.
He said the listing demonstrated the potential of domestic capital markets to mobilise resources for strategic sectors of the economy while strengthening the financial foundations of the cocoa industry.
“Today’s ceremony is more than the listing of a financial instrument. It represents an important milestone in the evolution of Ghana’s cocoa-financing framework and demonstrates what can be achieved when public institutions, regulators, capital-market participants, professional advisers and domestic investors work together towards a shared national objective,” he said.
The issuance attracted total bids of approximately GH¢3.586 billion from 38 institutional investors, with 36 successful bids amounting to GH¢3.396 billion accepted at a clearing yield of 11 per cent.
Dr Abbey said the level of demand reflected confidence in the cocoa sector and the transaction structure, as well as the capacity of Ghana’s domestic investment community to support large-scale financing initiatives.
“The breadth of participation and the level of demand recorded are particularly encouraging for an inaugural issuance under a newly established financing framework,” he said.
He added that the successful listing should encourage more domestic institutional investors to participate in subsequent issuances under the programme.
Financing cocoa purchases
The proceeds from the inaugural commercial paper issuance will provide working capital to support cocoa purchases during the 2026/27 crop season.
Dr Abbey said the financing was ultimately intended to ensure that funds were available to purchase cocoa beans from farmers across the country.
“At its heart, therefore, this transaction is about the cocoa farmer. It is about ensuring that adequate funding is available to purchase cocoa beans produced through the hard work of farmers across the country,” he said.
The COCOBOD Chief Executive noted that the financing arrangement was part of broader efforts to safeguard farmer incomes, facilitate timely payments and place the cocoa industry on a more sustainable financial footing.
For the 2026/27 season, the producer price has been set at GH¢42,400 per tonne, equivalent to GH¢2,650 per 64-kilogramme bag. This represents 71.18 per cent of the realised gross free-on-board (FOB) value, according to Dr Abbey.
He said the pricing arrangement was consistent with the framework under the Ghana Cocoa Board Act, 2026, which guarantees cocoa farmers at least 70 per cent of the realised gross FOB price.
Shift towards domestic financing
For years, Ghana’s cocoa purchases have relied substantially on external financing arrangements. However, changing market conditions and the need to strengthen COCOBOD’s financial resilience have prompted efforts to diversify the sources of funding.
Dr Abbey said the Domestic Cocoa Notes Programme represented a deliberate move towards mobilising domestic savings to finance cocoa purchases and meet other funding requirements within the sector.
“The Domestic Cocoa Notes Programme represents a deliberate transition towards a cedi-denominated financing model that mobilizes domestic liquidity, reduces reliance on offshore borrowing and establishes a stronger connection between Ghana’s capital market and one of the country’s most important productive sectors,” he said.
He explained that the programme was designed not merely to replace one source of funding with another, but also to broaden COCOBOD’s financing options, diversify funding risks and provide a flexible platform for meeting the seasonal and longer-term needs of the industry.
Cocoa Capital PLC was established as a dedicated financing vehicle wholly owned by COCOBOD to raise funds through the domestic capital market for approved cocoa-sector financing and refinancing purposes.
Under the programme, the commercial paper component will provide short-term liquidity for cocoa purchases, while the bond component is intended to refinance designated legacy obligations.
Transaction structure and investor confidence
The programme incorporates arrangements intended to strengthen transparency and discipline in the management of funds and repayment obligations.
Under the structure, selected receivables from executed cocoa forward-sales contracts have been assigned to Cocoa Capital PLC. Collections from these receivables are channelled through designated ring-fenced accounts and applied according to an agreed payment waterfall.
Dr Abbey said the arrangements were intended to improve cash-flow management and provide investors with greater visibility over repayment.
He, however, clarified that the commercial paper remained a senior unsecured obligation of Cocoa Capital PLC, with the assigned receivables and supporting cash-management arrangements forming part of the broader transaction structure.
He said maintaining investor confidence would require strong governance, transparent reporting and the consistent fulfilment of financial obligations.
“Ghana Cocoa Board and Cocoa Capital PLC remain fully committed to these principles,” he said.
Boost for Ghana’s capital market
The listing also expands the range of fixed-income instruments available to investors on the Ghana Fixed Income Market.
Dr Abbey said the ability to mobilise approximately GH¢3.4 billion for the inaugural issuance demonstrated the capacity of Ghana’s domestic capital market to support transactions linked to productive sectors of the economy.
He expressed hope that the transaction would encourage other Ghanaian companies and public-sector institutions to explore capital-market financing as a credible and sustainable funding option.
For domestic investors, the programme provides an opportunity to invest in a cedi-denominated instrument linked to the cocoa value chain, while the broader financing framework is intended to strengthen the relationship between domestic savings and local production.
Dr Abbey stressed that the long-term success of the programme would depend on effective governance, financial discipline and the productive use of funds raised from investors.
Institutions behind the transaction
The issuance involved several financial institutions, regulators and professional advisers.
The Securities and Exchange Commission provided regulatory oversight, while the Ghana Stock Exchange facilitated the admission and listing of the commercial paper on the Ghana Fixed Income Market. The Central Securities Depository supported the issuance, settlement and depository arrangements.
SEM Capital served as transaction adviser, while Absa Bank Ghana, CalBank, Fincap Securities, GCB Bank, One Africa Securities and Stanbic Bank Ghana acted as joint lead managers and bookrunners.
Sory@Law served as transaction counsel, KPMG as the special-purpose vehicle manager, PwC as reporting accountant and Beacon Ratings as the ratings agency.
Dr Abbey commended the institutions and the wider transaction team for their contributions to the structuring, regulatory engagement, investor education and execution of the programme.
He said the listing marked the beginning of a broader responsibility to manage the financing arrangement transparently, meet debt-service obligations and ensure that the benefits of the funds raised were felt across the cocoa value chain.
“The long-term strength of the platform will depend on our continued commitment to sound financial management, effective governance and the productive use of the funds entrusted to us,” he said.
The successful admission of Series 1 (Tranche 1) to the Ghana Fixed Income Market marks the first step in implementing the GH¢16.3 billion Domestic Cocoa Notes Programme, which seeks to connect Ghana’s domestic capital market with the financing needs of its cocoa industry.