The World Bank has issued a stark warning that Ghana’s cocoa sector requires “far-reaching reforms” to the Ghana Cocoa Board (COCOBOD) Act, cautioning that without decisive action, the fiscal gains achieved under the country’s economic reform programme could be rapidly eroded .
Robert R. Taliercio, World Bank Division Director for Ghana, Liberia and Sierra Leone, delivered the assessment at the launch of the Bank’s Tenth Ghana Economic Update in Accra on August 26. He said financial and operational inefficiencies within COCOBOD were placing a severe strain on both farmers and the nation’s public finances .
“We welcome continued discussion and debate on the Cocoa Board Act, and we suggest that far-reaching reforms of the Act are needed to promote market-based principles and minimise quasi-fiscal risks,” Taliercio stated .
The Bank’s call comes at a critical juncture for Ghana’s cocoa industry, which has been grappling with a confluence of crises. COCOBOD Chief Executive Dr. Randy Abbey recently disclosed that the institution inherited a staggering GH¢33 billion debt, comprising procurement obligations, road contracts, loans, and other financial commitments accumulated under previous management. The board’s liabilities now exceed its assets for the first time in its nearly 80-year history, with a negative equity position of GH¢3.8 billion .
‘Structurally Incomplete’ Recovery
Taliercio cautioned that Ghana’s economic recovery, while showing improvement in key macroeconomic indicators, remains “structurally incomplete” . He pointed to the country’s heavy dependence on cocoa and gold exports as a critical vulnerability, exposing the economy to fluctuations in international commodity prices .
The World Bank noted that cocoa sector challenges are among the key domestic risks that could undermine Ghana’s recovery. Taliercio stressed the need to strengthen the fiscal position and reduce reliance on measures that could create additional pressure on public finances .
The broader economic picture underscores the urgency. Despite Ghana’s economy expanding by 6% in 2025 and accelerating to 6.4% in the first quarter of 2026, the World Bank reports that 56.4% of Ghana’s population remains in poverty, with spatial disparities widening across the country . The growth has largely been concentrated in sectors with limited job creation capacity, failing to translate into improved living conditions for many households .
A Sector in Distress
The financial turmoil at COCOBOD has had cascading effects throughout the cocoa value chain. According to the World Bank, approximately GH¢10.1 billion is owed to Licensed Buying Companies (LBCs), contributing to delays in payments to farmers and operational disruptions . Producer Buying Company (PBC), the state-owned cocoa buyer, has accumulated debts of 673 million cedis ($60 million) and faces asset seizure by a consortium of Ghanaian banks . Some farmers have reportedly gone unpaid since November 2025 .
The crisis has been compounded by the collapse of COCOBOD’s traditional financing model. For more than three decades, the board relied on annual syndicated loans between US1.5 billion to finance cocoa purchases. However, Ghana’s sovereign debt restructuring disrupted access to this facility, forcing COCOBOD to adopt an unsustainable buyer-led funding model .
Legislative Response and Reform Efforts
In response to these pressures, Parliament passed the landmark Ghana Cocoa Board Bill, 2026, on July 30, replacing the decades-old Ghana Cocoa Board Act, 1984 (PNDCL 81) . The legislation introduces a comprehensive reform of the sector’s governance framework and establishes a new domestic financing model to replace the collapsed syndicated loan arrangement .
Key provisions include:
· A requirement that at least 50% of Ghana’s cocoa production be processed locally to promote value addition
· Legal backing for farmers to receive at least 70% of the Free on Board (FOB) price of cocoa
· Protection of cocoa farms from illegal mining, with stiff penalties for conversion to other uses
· Enhanced fiscal discipline, including mandatory audited financial statements presented directly to Parliament
However, the World Bank’s call for even “far-reaching reforms” suggests that the new legislation may not go far enough in addressing the structural issues that have plagued the sector.
The IMF Weighs In
The International Monetary Fund (IMF) has also weighed in, warning that further delays in implementing a comprehensive turnaround strategy could undermine fiscal consolidation and broader macroeconomic stability. The IMF has proposed ending quasi-fiscal activities at COCOBOD, establishing lower-cost financing, and adopting key reforms to restore financial sustainability .
Industry observers have long argued that COCOBOD’s quasi-fiscal operations—activities beyond its core commercial mandate—have contributed to balance sheet pressures and elevated borrowing costs .
A Pivotal Moment for Ghana’s Cocoa Sector
The World Bank’s warning comes as Ghana, the world’s second-largest cocoa producer after Côte d’Ivoire, faces declining production and rising debt servicing costs. Cocoa output declined from a peak of about 1.04 million metric tonnes in the 2020/2021 season to around 531,000 tonnes in 2023/2024 before recovering modestly .
Taliercio said that without decisive reforms in both the cocoa and energy sectors, Ghana risks quickly eroding the fiscal gains achieved under its economic reform programme . He called for diversifying Ghana’s export base and implementing reforms that support market-based economic activity to build a more resilient economy .
The Bank’s message was unequivocal: Ghana must sustain the reform momentum and address structural weaknesses in the cocoa sector to protect fiscal gains and support long-term economic growth .
