IFC Provides $300M to Protect Ghana's Cocoa Farmers

When Ghana's cocoa buying companies ran out of cash to pay farmers, a global financial powerhouse stepped in to save the season.

The International Finance Corporation has committed up to $300 million this year to rescue Ghana's struggling cocoa sector. The emergency funding addresses a financing shortfall that left licensed buying companies unable to pay farmers on time.

For the past 18 months, delays in funding from COCOBOD, Ghana's cocoa regulator, forced buying companies to finance their own operations in an already strained market. Without immediate help, farmers risked losing income and the entire supply chain faced collapse.

Kyle Kelhofer, IFC Senior Country Manager, explained the crisis during an interview on Channel One TV. "The LBC supply chain has had to self-finance," he said, describing the pressure on companies that purchase cocoa directly from farmers.

The IFC partnered with local banks, the Bank of Ghana, and the Ministry of Finance to deliver the funding in local currency. This approach ensures the money reaches farmers quickly through existing channels they already trust.

The organization has already provided over $100 million, with funding potentially reaching $300 million by year's end. The money flows through local banks directly to the licensed buying companies who work with farmers across the country.

The Ripple Effect

This rescue goes beyond just keeping one industry afloat. Ghana produces about 20% of the world's cocoa, making it the second-largest cocoa producer globally. Cocoa farming supports hundreds of thousands of Ghanaian families and drives economic activity in rural communities.

By stabilizing the buying companies, the IFC ensures farmers receive competitive prices at the farm gate. Competition among well-funded buyers means farmers get better returns for their harvest instead of accepting whatever price desperate companies can afford.

The local currency funding also protects farmers from exchange rate volatility. When financing comes in foreign currency, fluctuations can erode farmer payments, but this solution keeps transactions stable and predictable.

The collaboration between international finance, local banks, and government regulators shows how coordinated action can solve complex problems quickly. Rather than waiting for traditional government funding cycles, the partnership created an immediate safety net.

Ghana's cocoa farmers can now plant and harvest with confidence that buyers will have the cash to purchase their crops.