Food Buffer Stock seeks stronger liquidity buffer despite record profit

The National Food Buffer Stock Company (NAFCO) is seeking to strengthen its liquidity position despite recording a profit before tax of GH¢91.7 million in 2025.

Mr George Abradu-Otoo, the Chief Executive Officer (CEO) of NAFCO, said the company’s liquidity position remained adequate, but its short-term financial buffer was still marginal.

“Despite these significant gains, there are concerns that require the attention of Government, as the majority shareholder,” he said in his review of the company’s 2025 financial performance at the maiden Annual General Meeting.

“Secondly, while the Company’s liquidity position remains adequate, the Acid-Test Ratio of 1.18 in 2025, compared with 1.07 in 2024, remains marginal.”

Mr Abradu-Otoo said the company was targeting an acid-test ratio above 1.5 to reduce financial risks and strengthen its ability to meet short-term obligations.

The acid-test ratio measures a company’s ability to meet short-term liabilities using its most liquid assets, excluding inventory.

The CEO said working capital management remained a key concern requiring the attention of the Government to ensure the company’s financial sustainability.

NAFCO recorded a profit before tax of GH¢91.7 million in 2025, reversing a loss of GH¢19.4 million in 2024.

The performance, he said, represented the highest profit recorded by the company since its establishment 16 years ago.

“However, the 2025 Net Profit Before Tax of GH¢91.7 million represents a remarkable turnaround. It not only erased the GH¢19.4 million loss recorded in the previous year, but also represents the highest profit made by the Company since its establishment,” he said.

The company’s gross profit margin increased from 1.61 per cent in 2024 to 13.96 per cent in 2025, while its return on operating assets improved from negative 63.80 per cent to positive 26.29 per cent.

NAFCO also paid GH¢20.3 million in taxes to the State during the year, representing its highest annual tax contribution.

Mr Abradu-Otoo attributed the financial turnaround to structural reforms, including the establishment of a dedicated Procurement Department, strengthening of the Internal Audit Department and improvements in the Food Safety Department.

He said the reconstitution of the Board of Directors and its sub-committees, alongside improved collaboration between the Board, Management and staff, had also contributed to the company’s performance.

Despite the gains, he said sustaining progress would require continued operational discipline, sound governance, and a stronger financial foundation.

“The year 2025 was a turning point,” he said, adding that the company had improved payments to suppliers and strengthened its regional operations.

NAFCO purchases and stores food commodities, supports local farmers, and maintains strategic food reserves for emergencies and periods of high food prices.

The company also supplies food to approximately 733 second-cycle institutions under the Free Senior High School programme.

Mr Abradu-Otoo said the company would continue to strengthen its financial and operational management to sustain its growth and deliver on its national food-security mandate.