The Ghana Cocoa Board (COCOBOD) says it has commenced payments to Licensed Buying Companies (LBCs) to enable them to settle outstanding amounts owed to cocoa farmers for beans already delivered.

The development follows growing concerns about prolonged payment delays, which have left many farmers unpaid for several months and raised fears about the sustainability of the cocoa sector.

The issue was brought to the fore on Thursday, February 5, when the Minority in Parliament warned that the situation was causing severe hardship for farmers and threatening the entire cocoa value chain.

According to the Minority, COCOBOD currently owes LBCs more than GH¢10 billion for cocoa already taken over, a situation that has constrained the companies’ cash flow and limited their ability to pay farmers promptly.

COCOBOD has, however, explained that the delays were due to challenges securing syndicated financing, which compelled the Board to rely on alternative funding arrangements with international cocoa buyers.

Under those arrangements, LBCs pre-financed cocoa purchases, with COCOBOD reimbursing them later.

The Board has made substantial disbursements over the past few months to ease the situation and ensure farmers are paid what they are owed.

“In November, we paid over GH¢6 billion, in December more than GH¢5 billion, and in January another GH¢6 billion.

“This month alone, we have paid over GH¢620 million, and we are continuing to pay the LBCs so they can clear outstanding payments to farmers,” Jerome Kwaku Sam, Head of Corporate Communications at COCOBOD, said in an interview on Citi FM.

He added that the Board is working with the current administration to develop a new, more sustainable financing model for the cocoa sector to prevent a recurrence of such delays, stressing that COCOBOD remains committed to prompt farmer payments and the long-term stability of the industry.Source: myjoyonline.com