The Ghana Cocoa Board (COCOBOD) has signed an agreement for a $1.5 billion syndicated loan facility for the 2021/2022 cocoa crop season.
This is the largest loan facility so far in its history.
The funds, which will be used to purchase cocoa beans for the 2021/2022 crop season, have an interest rate of 1.1 percent plus libor.
The loan, which will be paid back in seven months, is expected to also help COCOBOD purchase about 600,000 metric tonnes of cocoa for the season and boost the cocoa sector’s speedy recovery from the pandemic.
Speaking at the ceremony, the Chief Executive of COCOBOD, Joseph Boahen Aidoo expressed his gratitude to the banks for their trust in Ghana’s cocoa industry for which reason they are willing to fund the operations of the industry.
He also assured all stakeholders that the loan will be used solely for the purpose for which it has been contracted.
The Deputy Chief Executive in charge of Finance and Administration at COCOBOD, Ray Ankrah also noted that with the 1.5 billion dollar syndicated loan, problems related to delays in payment will be a thing of the past.
“We all know the effects of the coronavirus pandemic on the sector. If you compare where we are now to this time last year, we were down on our shipment by about 30 % and demand basically for cocoa and cocoa related products just collapsed. We are recovering from it, and thanks to all the measures that we have taken and put in place, we are very confident that with the 1.5 billion, the problems relating to delays in payment may be a thing of the past,” he said.
Meanwhile, Minister for Food and Agriculture, Dr. Owusu Afriyie Akoto says the money will help in the implementation of policies to help develop the sector.
Overall, a total of 24 local and international financial institutions participated in the syndication.
These include Standard Chartered Bank, Mitsubishi UFJ Financial Group and the Industrial and Commercial Bank of China.
The signing comes months after Ghana’s cocoa sector experienced some positive developments.
COCOBOD exceeded its production target to reach a record 1.06 million metric tons for the 2020/21 season, beating the previous record of 1.024 million metric tons in the 2010/ 2011 crop season. Also, global demand for cocoa is projected to grow by 2.2% for the next crop season.
Since the 1992/93 crop season, COCOBOD has consistently and successfully, through the pre-export syndicated finance facility, obtained a receivables-backed syndicated loan each year from the international money market to finance its cocoa purchases.
According to the Ghana Cocoa Board, (COCOBOD), it is targeting about nine hundred and eighty thousand metric tonnes of cocoa for the 2021/2022 crop season. However, the 1.5 billion dollar syndicated loan for the 2021/2022 crop season, which will be paid back in seven months, is expected to help COCOBOD purchase about 600,000 metric tonnes of cocoa for the season and boost the cocoa sector’s speedy recovery from the pandemic.