Cocoa Capital PLC is expected to issue GHS6.3bn ($543mn) of debt this week as Ghana begins replacing its decades-old offshore cocoa-financing model with domestic capital.

The planned first tranche comprises a GHS2.3bn bond and GHS4bn of commercial paper, Reuters reported on September 23. It sits within a GHS16.3bn ($1.4bn) programme ceiling rather than representing a one-off GHS16.3bn borrowing.

The programme allows up to GHS14bn of commercial paper for seasonal cocoa purchases plus GHS2.3bn of longer-dated bonds to refinance existing Ghana Cocoa Board (Cocobod) debt. The tranche would use the entire bond component and the first GHS4bn of commercial-paper capacity, leaving up to GHS10bn available for further seasonal financing.

Cocoa Capital, a new special-purpose vehicle wholly owned by Cocobod, is the legal issuer. Investors hold claims on Cocoa Capital, with repayment intended to come primarily from cocoa-export receivables from selected forward contracts assigned to the vehicle and routed through controlled debt-service accounts.

The issue is the first major test of Ghana's new cocoa-financing model, and it comes later than planned: Cocobod chief executive Randy Abbey said in August that the money needed to be raised that month.

Meanwhile, although Ghana and Côte d'Ivoire agreed in June to harmonise farmgate prices and cocoa-season start dates, their openings have diverged. Côte d'Ivoire, the world's largest cocoa producer, began its main crop on September 1, while Ghana's start was delayed amid financing uncertainty. Ghana is now expected to open its 2026/27 season on September 25, Reuters reported, citing unnamed sources.

From syndicated loans to domestic debt

For more than three decades, Cocobod financed crop purchases through annual syndicated loans backed by forward cocoa sales. That model faltered in 2023/24, when weak production and financing problems left Cocobod struggling to meet some forward-sale obligations; output came in at 432,145 tonnes against an initial forecast of 800,000 tonnes.

Cocobod dropped syndicated borrowing for 2024/25 and turned to buyer pre-financing, but that arrangement fell through in 2025/26, contributing to delayed payments to farmers. The government then shifted to domestic bonds and short-term notes, with Abbey saying Cocobod would recycle short-term funding rather than borrow the full seasonal requirement at once.

IntelliNews reported in August that Cocobod estimated the domestic market could provide about GHS16bn annually. Abbey has cited the size of Ghana's pension-fund industry — which he put at more than GHS100bn — as evidence of available local liquidity.

Cocobod is nevertheless returning to investors after restructuring its own paper. It launched a GHS7.93bn Cocoa Bills exchange in 2023, with 97.38% of eligible holdings tendered for longer-dated bonds. Payment of the GHS162mn owed to holders who stayed outside the exchange was completed only in July.

President John Mahama signed the Ghana Cocoa Board Act, 2026 on August 26. The law underpins wider sector reforms and guarantees farmers at least 70% of gross free-on-board (FOB) proceeds, leaving the balance to cover industry costs, margins and Cocobod's operations.

Production adds a further constraint. Ghana produced about 771,000 tonnes in 2025/26, above Cocobod's initial 650,000-tonne forecast, after producing 603,840 tonnes the previous season, Reuters reported on September 23. Cocobod expects output to fall by at least 16% in 2026/27.

StoneX market intelligence analyst Lucca Bezzon said in September that cocoa trees in Ghana and Côte d'Ivoire were still recovering from heavy June rainfall, although he cautioned that slow early-season deliveries did not necessarily imply an equivalent fall in final output.

Pricing the new model

Pricing may prove as important as the amount Ghana can raise. Investment bankers and financial-market economists cited by Business Post on September 23 estimated that Cocoa Capital's 270-day commercial paper could require a return of about 11-12.5%, compared with 9.982% on Ghana's latest 364-day Treasury bill.

Longer-dated paper could prove more expensive. Market estimates put a five-year Cocoa Capital bond at roughly 13.5-15%, reflecting the premium investors may demand over sovereign securities despite the programme's ring-fenced receivables and other credit protections.

The debut will also enter a domestic fixed-income market in which demand has not been uniformly strong. Ghana's September 18 Treasury-bill auction attracted GHS3.956bn of bids against a GHS4.121bn target, a shortfall of about GHS165mn. It was the first undersubscription after 12 weeks of oversubscription, according to 3Business.

For investors, the pricing question is whether the spread over government securities adequately compensates for exposure to a new issuer, short-term refinancing needs and likely limited secondary-market liquidity. The credit question is separate: whether export receipts remain sufficient, and are captured reliably enough, to service the securities despite production volatility and Cocobod's recent restructuring history.

The financing problem extends beyond Cocobod to Licensed Buying Companies (LBCs), which purchase beans from farmers.

IntelliNews reported on September 18 that the Chamber of Cocoa Marketers Ghana put unpaid Cocobod obligations to buyers at nearly GHS4bn ($348mn), warning that the arrears were making it harder for LBCs to obtain fresh credit. Some buyers were borrowing at interest rates of as much as 40%, according to the chamber.

Cocobod acknowledged outstanding payments but said such balances were not unusual at the end of a season and did not indicate an inability to meet its obligations.

Banks take more of the load

Commercial banks and development finance institutions are also taking a larger role in funding cocoa purchases.

Absa Bank Ghana, a subsidiary of Absa Group (JSE: ABG), and the International Finance Corporation announced a $50mn unfunded risk-participation facility on September 16. IFC said the facility, backed by the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), would enable Absa to extend up to $200mn to LBCs buying traceable cocoa.

The arrangement is expected to help sustain market access for more than 139,000 smallholder farmers.

In January, IFC and GAFSP announced up to $67mn in risk participation with Access Bank Ghana (GSE: ACCESS), enabling the bank to provide as much as $134mn to LBCs.

IFC also has a separate cocoa-financing arrangement with Société Générale Ghana (GSE: SOGEGH), under which it agreed to provide up to $40mn in risk-sharing support to unlock as much as $80mn of lending to cocoa buyers.

Together, the debt programme and bank facilities spread cocoa-financing risk across domestic investors and commercial lenders rather than concentrating it in a single offshore loan. Whether that proves more resilient will depend on keeping funding costs sustainable through weaker production cycles.