COCOBOD has finalized a $1.3 billion receivables-backed trade finance facility for the purchase of cocoa in Ghana in the 2018/2019 crop year.
At a signing ceremony in Amsterdam, The Netherlands, Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo said, the facility will be centred on equipping cocoa farmers for high crop yields.
Mr Boahen Aidoo said, “the facility that you sign today is of tremendous importance to Ghana hence this high-powered delegation here present.
By appending your signatures to this facility, you are not only sealing the deal but you also indicating your confidence in the cocoa industry and by extension the entire economy of Ghana”He added, “We are indeed encouraged by this confidence reposed in us and we want to assure you that it is not misplaced.”
Mr Boahen Aidoo assured lenders that the COCOBOD is on course to meet its financial obligations in spite of a dwindling crop harvest caused by dry weather and plant disease.
“Over the past 25 years, we have consistently maintained that explicit reputation of honouring repayment of the year-after-year syndicated loan without a single default. This record in the financial market is remarkable.”
Challenges
“Whiles painting such enviable credential, we must not be deceived that all is rosy in the cocoa industry back home,” he said.
“…The volatility of cocoa prices, climate change and poor road infrastructure linking producing communities to markets and service centres and to the warehouses to the ports are fundamental challenges that contrive against the industry.”
Mr Boahen Aidoo said, "Within the past dozen months and a half, we have been able to reverse the declining trend of cocoa production in Ghana from 778,000 metric tons to 969,000 metric tons and sustained the up term because of the productivity enhancement programmes.”
The facility which would be paid over the next seven months would have an interest rate lower than about 2 per cent paid on last year’s facility. The facility was led by ABN Armro, Bank of China, ICBC, Standard Chartered Bank and 17 other banks. Ghanaian based banks that participated in the deal include; ECOBANK, Barclays and SG-SSB.
The first drawdown of the loan will see $640 million by October 4 with the final tranche expected by the end of November 2018.
The country operates a two-cycle cocoa year consisting of the 33-week main crop (October-June) that are mainly exported to Europe and Asia and a minor light crop (11-week) which is discounted to local processing firms including the state-owned Cocoa Processing Company (CPC).
Ghana produced an unprecedented one million tonnes of cocoa during the 2010-11 crop-year, thanks to good weather and improved farming techniques – but production declined to about 850,000 tonnes last season.