Cocoa Capital PLC has listed GH¢3.39 billion worth of commercial paper on the Ghana Fixed Income Market (GFIM), marking a major step towards strengthening domestic financing for Ghana’s cocoa industry and reducing the Ghana Cocoa Board’s (COCOBOD) dependence on offshore borrowing.
The 266-day senior unsecured debt instrument represents the first issuance under Cocoa Capital’s GH¢16.3 billion Domestic Cocoa Notes Programme. The initiative is designed to raise local-currency funding for cocoa purchases and refinance existing cocoa-related debt.
Under the programme, up to GH¢14 billion will be raised through commercial paper to finance cocoa purchases, while GH¢2.3 billion will be allocated to bonds intended to refinance existing cocoa bonds under Ghana’s Domestic Debt Exchange Programme (DDEP).
The financing arrangement is expected to strengthen Ghana’s domestic capital market by connecting institutional investors’ savings with the seasonal working-capital needs of the cocoa sector.
Cocoa Capital Raises GH¢3.39 Billion from Institutional Investors
Cocoa Capital, a financing subsidiary wholly owned by COCOBOD, attracted bids worth approximately GH¢3.59 billion from 38 institutional investors during a three-day bookbuilding exercise.
Of the bids received, 36 successful offers amounting to GH¢3.395 billion were accepted at a clearing yield of 11 per cent.
Speaking at the listing ceremony, COCOBOD Chief Executive Dr. Ransford Annertey Abbey said the transaction demonstrated the ability of Ghana’s domestic financial market to support sectors that are strategically important to the national economy.
He explained that the Domestic Cocoa Notes Programme represents a deliberate move towards a cedi-denominated financing model that mobilises local funds, diversifies funding sources and reduces exposure to international borrowing.
According to Dr. Abbey, the initiative will strengthen the relationship between Ghana’s capital market and the cocoa industry, which remains an important contributor to the country’s economic activity.
GH¢3.39 Billion Commercial Paper to Finance 2026/27 Cocoa Season
Proceeds from the maiden commercial paper issuance will support COCOBOD’s cocoa purchases during the 2026/27 crop season.
The funds are expected to help the board meet its seasonal working-capital requirements while broadening its access to financing beyond traditional borrowing arrangements.
Dr. Abbey said the programme was designed to provide a flexible financing platform that could address both immediate cocoa purchasing needs and longer-term debt obligations.
He noted that the objective goes beyond replacing offshore borrowing with domestic funding. Instead, the programme seeks to diversify financial risks and establish a sustainable funding framework capable of responding to the cocoa industry’s changing financing requirements.
The success of subsequent issuances, however, will depend on repayment performance, effective corporate governance, transparent financial reporting and the ability to maintain investor confidence.
How the Cocoa Capital Financing Programme Works
The transaction uses selected receivables from executed cocoa forward-sales contracts assigned to Cocoa Capital.
Collections from these receivables are channelled through designated, ring-fenced accounts and distributed according to an agreed payment waterfall to meet the programme’s financial obligations.
However, the commercial paper remains a senior unsecured obligation of Cocoa Capital. Although the receivables assignment and cash-management arrangements provide a structure for managing collections and repayments, they do not convert the instrument into secured debt.
Dr. Abbey stressed that investor confidence would depend on strong oversight, disciplined financial management, transparent reporting and consistent fulfilment of repayment commitments.
He said COCOBOD and Cocoa Capital recognised the importance of earning investors’ trust through responsible execution and compliance with their financial obligations.
Cocoa Capital Chairman Highlights Governance and Investor Confidence
Cocoa Capital Chairman John Awuah cautioned that the successful first issuance would not, by itself, establish the long-term credibility of the financing programme.
He emphasised that the effectiveness of the structure would depend on how consistently it was managed, adding that the company’s activities must remain aligned with its mandate and established governance and reporting requirements.
According to Mr. Awuah, future investor participation will depend significantly on the performance of the maiden issuance.
He explained that the broader significance of the programme lies in demonstrating how clearly defined revenue streams, supported by credible legal arrangements and transparent cash-flow management, can attract domestic investment into productive sectors of the economy.
The chairman reaffirmed the company’s commitment to sound corporate governance, disciplined financial execution and the long-term sustainability of the financing framework.
Ghana Stock Exchange Says Cocoa Financing Marks a Milestone
Ghana Stock Exchange Managing Director Abena Amoah described the listing as an important demonstration of the domestic capital market’s capacity to mobilise funding for activities that are central to Ghana’s economy.
She noted that the transaction marked the first time Ghana was using its domestic debt capital market, through Cocoa Capital PLC, to raise financing for its cocoa purchasing programme.
According to figures she presented at the ceremony, Ghana’s public capital markets mobilised approximately GH¢6.79 billion for businesses and institutions through equity and debt instruments between January 2025 and the time of the presentation.
During the period, the market recorded three initial public offerings, one rights issue, eight corporate bond issuances and two commercial paper transactions.
Ms. Amoah said Cocoa Capital’s listing could encourage other institutions to explore domestic capital-market funding for commercially viable projects and business activities.
She described the transaction as evidence of how local financial markets can mobilise cedi resources for national priorities while diversifying funding channels and creating opportunities for institutional investors.
Ghana’s Capital Market Attracts More Investors
Investor participation in Ghana’s capital market has also expanded in recent years.
Ms. Amoah disclosed that accounts at the Central Securities Depository increased from 1.5 million in December 2024 to 1.8 million by September 2026.
She said the growing investor base must be supported by improved financial literacy, stronger disclosure practices and effective regulation to sustain confidence in the market.
According to the Ghana Stock Exchange managing director, capital markets depend heavily on trust, making timely reporting, transparent disclosure, responsible board oversight and effective investor engagement essential.
She therefore encouraged Cocoa Capital and COCOBOD to comply with listing requirements, maintain effective investor relations and provide timely information as the Domestic Cocoa Notes Programme expands.
Ghana Cocoa Producer Price Set at GH¢42,400 Per Tonne
The financing programme comes as Ghana prepares to fund cocoa purchases for the 2026/27 season, with the producer price set at GH¢42,400 per tonne, equivalent to GH¢2,650 per 64-kilogramme bag.
Dr. Abbey said the producer price represents 71.18 per cent of the realised gross free-on-board (FOB) value, exceeding the minimum 70 per cent share guaranteed to cocoa farmers under the Ghana Cocoa Board Act, 2026.
The domestic financing initiative is expected to help COCOBOD secure the funds needed to purchase cocoa beans while supporting timely payments to farmers.
Its long-term effectiveness will depend on whether future issuances can raise sufficient funds at sustainable borrowing costs and whether proceeds from cocoa sales can adequately service the programme’s obligations.
For cocoa farmers and other stakeholders, the availability of reliable financing remains important to the purchasing process and the wider cocoa value chain.
GH¢2.3 Billion Bond Component to Refinance Existing Cocoa Debt
Beyond financing seasonal cocoa purchases, the Domestic Cocoa Notes Programme includes a GH¢2.3 billion bond component intended to refinance existing cocoa bonds under the Domestic Debt Exchange Programme.
This gives the initiative a broader debt-management role, allowing Cocoa Capital to address existing obligations while supporting COCOBOD’s immediate financing needs.
The programme’s success will therefore depend not only on its ability to raise funds but also on its capacity to manage liabilities, meet repayment schedules and maintain investor confidence over time.
Cocoa Capital Chairman John Awuah reiterated that the credibility of the financing arrangement would ultimately be determined by the company’s ability to honour its commitments and maintain disciplined financial management.
COCOBOD Pledges Transparency as Domestic Financing Expands
Dr. Abbey said COCOBOD and Cocoa Capital would continue engaging investors, meeting reporting obligations and fulfilling their debt-service commitments as the programme develops.
He reaffirmed the institutions’ commitment to transparent communication, regulatory compliance and responsible financial management.
The maiden issuance represents an important development in Ghana’s efforts to deepen its domestic debt market and mobilise local-currency financing for the cocoa industry.
However, sustaining the initiative will require consistent repayment performance, effective governance and sufficient cash flow from cocoa sales to meet financial obligations.
If successfully implemented, the Domestic Cocoa Notes Programme could provide COCOBOD with a broader range of financing options, strengthen links between domestic investors and agricultural production, and support the funding of Ghana’s cocoa purchases in the years ahead.
Source: newsthemegh.com