Government has announced it will absorb an estimated $150 million in losses expected to be incurred by the Ghana Cocoa Board (COCOBOD) as part of efforts to settle unpaid cocoa farmers.

The move follows Cabinet’s directive for COCOBOD to commence immediate payment to farmers who had already supplied cocoa beans but were yet to be paid.

The announcement comes on the back of a 28 percent reduction in Ghana’s cocoa farmgate price — the first such cut since at least 2020 triggered by declining global cocoa prices and mounting payment arrears.

Government to cover losses on 50,000 tonnes

Speaking on Joy FM’s Top Story, Deputy Finance Minister Thomas Ampem Nyarko explained that approximately 50,000 metric tonnes of cocoa beans had already been supplied by farmers before the price reduction took effect.

Because the deliveries were made under the previous producer price — slightly above $5,200 per tonne — government has agreed that farmers will be paid at the old rate.

Under current global market conditions, this arrangement means COCOBOD will incur significant financial losses.

“Government has agreed to pay the farmers the price that was agreed with them earlier. That means COCOBOD is going to make huge losses of about $150 million. Government is absorbing that cost,” the Deputy Minister stated.

Fiscal impact

At prevailing exchange rates, the $150 million translates to roughly GH¢1.6 billion — a substantial fiscal commitment at a time when COCOBOD has faced well-documented liquidity constraints.

While the Finance Minister earlier announced that unpaid farmers would be settled, the funding source had not been clearly outlined.

The latest clarification signals direct government intervention to stabilise the cocoa sector, protect farmer incomes for already delivered produce, and restore confidence within the value chain despite ongoing global price pressures.

The decision forms part of broader reforms aimed at strengthening the financial sustainability of Ghana’s cocoa industry.