The International Finance Corporation (IFC) and Société Générale (SG) Ghana have announced a significant partnership aimed at bolstering Ghana's vital cocoa sector.
IFC will provide a local currency loan of up to $40 million equivalent through an unfunded risk-sharing facility to SG Ghana.
This facility is designed to unlock up to $80 million equivalent in financing for Licensed Buying Companies (LBCs), enabling them to purchase cocoa beans directly from smallholder farmers.
In addition to financial support, IFC will offer advisory services and capacity building to SG Ghana. This will focus on enhancing traceability, promoting sustainable sourcing practices, and mitigating deforestation risks within the cocoa value chain.
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The initiative seeks to build resilience by improving cash flow for both farmers and LBCs, strengthening market linkages, and championing environmentally sound practices to ensure the long-term viability of cocoa farming in Ghana.
Ghana's cocoa sector is a cornerstone of its economy, accounting for roughly 6% of GDP and supporting the livelihoods of an estimated 30% of the rural population. However, challenges such as limited access to finance and declining productivity have impacted the sector.
Hakim Ouzzani, Managing Director of Société Générale Ghana, emphasized that this partnership underscores IFC's recognition of SG Ghana's dedication to financing Ghana's real economy, particularly cocoa. Kyle Kelhofer, IFC Senior Country Manager for Ghana, added that this collaboration is crucial for addressing the cocoa sector's biggest barrier: access to finance.
Over a four-year period, the facility is projected to facilitate up to $320 million in cocoa trade and benefit approximately 75,000 smallholder farmers.
This investment specifically supports the purchase of Rainforest Alliance certified cocoa, contributing to environmental sustainability and reducing deforestation risks.
Rainforest Alliance certification ensures cocoa is produced under strict environmental, social, and economic standards, safeguarding biodiversity and improving livelihoods.
IFC and Société Générale Ghana have a longstanding relationship, with IFC having provided around $75 million in local currency financing since 2020 to support SG Ghana's lending to small and medium-sized enterprises across the country.
