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Cocoa buyers warn of mounting debt as funding delays bite (Image credit: Ghanaian Times)

The Licensed Cocoa Buyers Association of Ghana has issued a strong warning over growing financial pressures in the cocoa sector, urging the government to urgently secure a funding facility to support the purchase of about 300,000 metric tonnes of cocoa between now and September.

The association said delays in financing are placing licensed buying companies under severe strain and could eventually lead to the collapse of the cocoa buying system if no immediate action is taken. It stressed that any funds raised must be strictly reserved for cocoa purchases, noting that the primary responsibility of the Ghana Cocoa Board is to buy cocoa beans produced by farmers.

Addressing a press conference in Accra, the Executive Secretary of LICOBAG, Victus Dzah, said uncertainty around the current farmgate price of cocoa was worsening anxiety across the entire value chain.

“The government must urgently make a determination on the current farmgate price of cocoa to allay the apprehension of all value chain actors,” he said.

Mr Dzah explained that since the 2023 to 2024 cocoa season, the industry has struggled with serious funding gaps following COCOBOD’s failure to secure its usual syndicated loan facility.

“Instead of the usual annual syndication of US$1.3bn or more, COCOBOD was able to raise only $500 million, which was secured six months after the opening of the season on September 8, 2023. As a result, Licensed Buying Companies (LBCs) were compelled to pre-finance cocoa purchases through facilities raised from various banks at very high interest rates, with the Ghana Reference Rate standing at 29.8 per cent at the time,” he explained.

According to him, part of the current crisis stems from the COCOBOD and Cocoa Marketing Company off taker shipment arrangement, which he said failed to respond effectively to prevailing market conditions.

“Why should we move from a period of rollovers in the previous season because COCOBOD could not deliver on their contracts, and this season we cannot buy cocoa produced by farmers because our pricing mechanism is not competitive enough?” he asked.

Dzah said traders failed to enter the market early and take advantage of high global prices, worsening the situation. He revealed that COCOBOD only made its first payment for cocoa delivered to the port on January 26, 2024, six months after delivery, despite farmers having already been paid in full by LBCs.

“This unfortunate development pushed all LBCs into huge debts, leading to the total collapse of many companies,” he remarked.

He added that the debt burden continues to grow as COCOBOD has not compensated LBCs for the high interest costs incurred during pre financing, despite earlier assurances.

Calling for reforms, Dzah urged COCOBOD, CMC and traders to adopt more proactive sales strategies, strengthen oversight of trading operations and build professional capacity within the system. He also appealed for an end to what he described as “rhetorics and theatrics”, urging COCOBOD to focus on its core mandate and divest from non essential businesses.

Mozambique and UAE move to strengthen ties in agriculture and food security. (Image credit: AIM)

Mozambique and the United Arab Emirates have signalled a renewed commitment to strengthen cooperation in agriculture, food security and environmental protection, as both countries seek closer strategic partnerships.

The announcement was made by Mozambique’s Minister of Agriculture, Environment and Fisheries, Roberto Mito Albino, during meetings held in Dubai on the margins of the World Governments Summit. The discussions took place alongside a session on the future of energy and industries, where Mozambique is participating as part of its broader international engagement.

According to Minister Albino, cooperation between the two countries is being reshaped to reflect growing bilateral relations and shared priorities. He said talks with the UAE Minister of Climate Change and Environment, Amna Al Dahak, resulted in an agreement to establish a joint technical team tasked with putting into action commitments outlined in an existing Memorandum of Understanding on environment and biodiversity.

The team will focus on translating policy agreements into concrete programmes that support sustainable agriculture, environmental conservation and inclusive economic growth.

Minister Albino stressed the importance of ensuring that small scale farmers benefit from agricultural development. “Small-scale producers should be integrated to increase their income and contribute to the overall growth of the country. We also reject the idea that the industrialization of agriculture represents a threat to the environment. Today, to increase overall production, we focus on expanding areas, which leads to deforestation, because yields per hectare are low. Industrialization allows for greater production in a smaller area and with less environmental impact”, he said.

He pointed to the Mapai dam project in Gaza province as a clear example of how modern infrastructure can support both productivity and environmental protection. The dam is expected to support intensive agricultural activity within a limited area, reducing pressure on forests and fragile ecosystems.

“With 200,000 hectares of irrigable land, we can obtain the yield that is currently achieved on about one million hectares with low productivity levels. The dam will also allow for flood control, energy production, and environmental protection in the Limpopo basin”, he said.

On innovation, Minister Albino highlighted the need to embrace modern technologies that support sustainable farming. He said agricultural industrialisation can be achieved without harming the environment by applying conservation practices, responsible use of inputs and cleaner energy solutions.

“It is possible to industrialize agriculture in an environmentally friendly way. It must include conservation practices, rational use of inputs, and technologies that eliminate the need for fossil fuels harmful to the environment.”

He also underlined the importance of digital transformation, adding: “Mozambique cannot remain on the sidelines of global trends linked to new technologies and artificial intelligence. The world is becoming digital and Mozambique must be digital.”

The renewed partnership with the UAE is expected to support Mozambique’s efforts to modernise its agricultural sector while protecting natural resources and improving food security.

Poor maize yields blamed on reuse of hybrid seeds.

The government has defended the long standing practice that requires maize farmers to buy new seeds every planting season, explaining that most maize grown across the country comes from hybrid varieties that do not perform well when replanted.

 David Silinde, Deputy Minister for Agriculture addressed concerns raised by Urambo MP Magreth Sitta, who questioned why farmers are unable to reuse seeds harvested from the previous season instead of purchasing fresh supplies each year.

Silinde said the issue lies in the nature of hybrid seeds, which are specifically developed to deliver high yields, resist diseases and tolerate harsh weather conditions. These qualities, he explained, are only guaranteed during the first planting.

“Most of the maize seeds used by farmers nationwide are hybrid seeds, developed by crossing two or more parent lines of the same family. Due to their scientific structure, these seeds cannot retain their superior qualities when reused, which affects harvests and overall agricultural efficiency,” he said.

According to the Deputy Minister, certified seeds sold through registered agro dealer shops undergo extensive laboratory testing before reaching farmers. These tests confirm their quality and ensure they meet standards for productivity and resilience. However, once farmers save and replant seeds harvested from hybrid crops, the original traits weaken or disappear completely.

He added that this decline results in smaller harvests, reduced income and lower overall productivity, which ultimately affects national food security. For this reason, farmers are advised to use certified seeds each season to maintain stable production.

In a supplementary question, Sitta asked what steps the government is taking to lower maize production costs for low income farmers and how it plans to protect crops from destructive pests.

In response, Silinde said the government remains committed to supporting farmers through its agricultural input subsidy programme. The initiative provides subsidised seeds, fertilisers and pesticides, helping to reduce farming expenses while improving yields.

He noted that the programme is designed to ensure small scale farmers can access quality inputs without placing too much strain on their finances, while also strengthening pest control efforts to safeguard crops throughout the growing season.

Swedfund backs Phatisa Food Fund 3 to strengthen Africa’s food systems.(Image credit: Swedfund)

Swedfund has committed US$15mn to Phatisa Food Fund 3, a private equity fund focused on established businesses operating across the food value chain in several African countries.

The investment is designed to strengthen food security, support the creation of decent jobs, and help build more resilient and sustainable food systems across the region.

Food systems in Africa are facing growing pressure from rapid population growth, climate related challenges, and fragmented supply chains. These factors continue to limit access to affordable and nutritious food while placing strain on producers, processors, and distributors. Improving how food is produced, processed, and delivered is increasingly important to ensure food availability while supporting livelihoods and long term economic stability.

Phatisa Food Fund 3 plans to invest in companies that are looking to scale their operations or transition ownership. Drawing on Phatisa’s long standing experience in the food and agriculture sector, the fund is expected to support businesses with the potential to increase production capacity, improve operational efficiency, and create more stable employment opportunities. These investments are aimed at strengthening local and regional markets while encouraging sustainable business practices.

Sebastian Süllmann, Investment Manager for Food Systems at Swedfund, said, “Strengthening food systems is essential for inclusive and resilient growth across African markets. Through this investment, we help channel long-term capital to companies that can expand production, support decent jobs, and improve access to affordable and nutritious food. The investment also contributes to deeper value chain integration, supporting more stable and sustainable livelihoods over time.”

Swedfund’s contribution forms part of an US$86mn first close for the fund, alongside other development finance institutions including BII, Norfund, IFC, and FinDev Canada. Together, these partners aim to mobilise long term capital to support food system transformation and economic development across Africa.

The project will be led by the African Development Bank Group and will focus on one of Southern Africa’s most important shared river systems.(Image credit: GEF)

The Global Environment Facility has approved a grant of US$9.45million to support a major regional initiative aimed at improving water governance, protecting ecosystems and strengthening climate resilience across the Zambezi River Basin.

The project will be led by the African Development Bank Group and will focus on one of Southern Africa’s most important shared river systems.

Stretching across eight countries Angola, Botswana, Malawi, Mozambique, Namibia, Tanzania, Zambia and Zimbabwe the Zambezi River Basin plays a central role in the lives of more than 51 million people. It provides water for homes and farms, supports hydropower generation, sustains fisheries and underpins globally important ecosystems such as the Barotse Floodplain and the Zambezi Delta. In recent years, however, the basin has come under growing strain from climate variability, deforestation, pollution and weak coordination in water management. Average river flows have fallen by almost 20 percent over the past two decades, while repeated droughts and floods continue to threaten food production, energy supply and natural habitats.

The new GEF funded project will strengthen the ability of the Zambezi Watercourse Commission and its member states to manage shared water resources more effectively. A key focus will be the adoption of an integrated water energy food environment approach that supports long term planning and cooperation, in line with regional strategies and agreed water protocols. The initiative will promote better coordination across countries through shared guidelines, aligned environmental and social assessments and improved access to climate informed decision making tools, including the Zambezi Water Information System.

To respond to increasingly unpredictable river flows, the project will test more flexible dam operation and environmental flow practices designed to balance power generation, flood management and ecosystem protection. New financing approaches will also be introduced, including payments for ecosystem services and user fee systems, to help secure sustainable funding for water and environmental management.

Gareth Phillips, Climate and Environment Finance Manager at the African Development Bank said, “Working together, Zambezi riparian states are strengthening climate resilient river basin management to protect ecosystems and secure water, energy, and food for millions across Southern Africa.This project supports coordinated, climate informed, and financially sustainable river basin management that underpins ecosystems, thereby promoting Southern Africa’s development agenda.”

Women, young people and local communities will be actively involved throughout the project to ensure inclusive and locally grounded outcomes.The GEF grant is expected to unlock more than $140 million in additional funding from governments, development partners and the private sector, helping to deliver lasting environmental and development benefits across the region.

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