Banking Sector Backs Government Intervention to Stabilise Cocoa Industry
The Chief Executive Officer of the Ghana Association of Banks has described the government’s decision to intervene and prevent the collapse of the Ghana Cocoa Board as “unpalatable but necessary,” insisting the move was critical to safeguarding the country’s financial stability.
According to the CEO, although the rescue decision may not have been politically convenient or economically comfortable, it was the most prudent step to avert wider systemic risks that could have rippled through Ghana’s banking sector and the broader economy.
COCOBOD’s Strategic Importance Cannot Be Ignored
The banking executive noted that COCOBOD remains one of Ghana’s most strategic state institutions, given cocoa’s central role in export earnings, rural livelihoods, and foreign exchange inflows.
He warned that allowing the institution to collapse would have triggered severe consequences, including loan defaults, job losses, and potential instability within the financial system.
“Sometimes difficult decisions must be taken in the national interest,” he indicated, adding that stabilising COCOBOD ultimately protects farmers, banks, and the economy at large.
Financial Exposure of Banks at Stake
The CEO explained that several commercial banks have significant exposure to cocoa financing and related value chain activities. A collapse of COCOBOD, he said, would have undermined loan portfolios and weakened investor confidence.
He stressed that safeguarding the institution was not about shielding inefficiency but about preventing a chain reaction that could have destabilised the entire financial ecosystem.
Reform and Accountability Must Follow
While supporting the intervention, the Association of Banks CEO emphasised the need for structural reforms, transparency, and stronger financial management within COCOBOD.
He maintained that any rescue package must be accompanied by strict oversight to ensure long-term sustainability and accountability.
“The support must go hand in hand with reforms,” he stated, urging policymakers to address underlying inefficiencies to prevent a recurrence of financial distress.
Cocoa Sector Stability Critical to Economic Recovery
The remarks come amid ongoing efforts to stabilise Ghana’s cocoa sector, which has faced production challenges, revenue shortfalls, and debt pressures in recent years.
Industry watchers say the government’s intervention underscores the strategic importance of cocoa to Ghana’s macroeconomic recovery agenda.
As debate continues over the cost and implications of the bailout, banking industry leaders insist the alternative — allowing COCOBOD to fail — would have been far more damaging.
