Ghana's Cocoa Crisis: Banks Struggle Amidst Mounting Debts

Ghana's financial sector is under significant strain as licensed cocoa buyers owe banks up to $750 million, according to the Licensed Cocoa Buyers Association of Ghana. This debt crisis coincides with the country's deepest economic downturn in decades, severely impacting the sector's ability to procure cocoa beans.

The challenges are partly due to two consecutive poor cocoa harvests caused by crop disease and adverse weather conditions. This comes amid a global collapse in cocoa prices driven by weak demand and resultant oversupply in key producing nations like Ghana and Ivory Coast.

Samuel Adimado, the association's president, attributed the debts to the Ghana Cocoa Board's non-core spending. In response, the Ghanaian government has cut the fixed price for cocoa beans and launched a financing scheme, but banks remain exposed, struggling to recover in the wake of recent domestic bond restructuring.