Outstanding cocoa road contracts reached GH¢21b, only GH¢4.4b has been accounted for - Finance Minister

Finance Minister, Dr Cassiel Ato Forson has expressed concern that the cocoa sector, once the backbone of the Ghanaian economy, is struggling due to years of mismanagement.

He noted that despite record-high world market prices, the cocoa sector is no longer able to support the economy as it once did.

Dr Forson revealed that outstanding cocoa road contracts have reached GH¢21 billion (US$1.3 billion) in 2024, with only GH¢4.4 billion accounted for in COCOBOD’s financial statements.

He made these statements during his presentation of the 2025 Budget at Parliament House in Accra on Tuesday, March 11, 2025.

"The sector faces declining output and financing challenges characterized by unsustainable debt, rollover contracts and quasi-fiscal expenditures including cocoa roads, a non-core function," he said. 

"Mr Speaker, cocoa production has dropped by nearly 50 per cent over the past three years. In the 2023/2024 crop season, COCOBOD was unable to supply 330,000 tonnes of cocoa to meet its full contractual obligation. This under-supply has been rolled over for subsequent supply by the new administration," he stressed.

He also highlighted that the 2023/24 forward sales contracts, locked in at lower prices than the current market rates, have led to a revenue loss of US$840 million for COCOBOD and have further impoverished the Ghanaian farmer.

"Mr Speaker, the rolled-over contracts will result in additional losses of US$495 million this year. This implies that for every tonne of cocoa delivered this year in fulfilment of the rolled-over contracts, COCOBOD and the Ghanaian farmer will lose US$4,000 in revenue."

"There are also risks in relation to market price differentials and smuggling. The large gap between market prices and farmer payments encourages smuggling and threatens long-term sustainability of the industry."

"Mr Speaker, COCOBOD’s outstanding debt amounts to GH¢32 billion, of which GH¢11.92 billion is due to
be paid in 2025," he concluded on the cocoa sector.