Ghana’s cocoa regulator, COCOBOD, has reached an agreement with a number of banks to raise $1.3 billion at an interest rate of 0.65 percent plus libor rate towards the 2017/2018 purchase of cocoa beans.
The syndicated loan was signed in France yesterday (20/09/2017), it had 25 banks participating in the transaction.
Speaking to journalists via a teleconference after signing the agreement in Paris, the Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo said the board opted for US$1.3 billion lower than the US$1.8 billion raised last season due to the falling price of cocoa on the world market.
“As I have indicated, the price has fallen with a difference of over a 1,000 dollars and with that difference, we cannot go and secure another loan as high as last season’s,” he said.
Mr. Aidoo explained that it will be difficult to meet the target if COCOBOD goes for a loan above the current fund it has secured from the syndicated banks.
“We use cocoa to collateralize the latest facility. You must have enough beans and because of the fall in price, we need to get more cocoa to pay the 1.3 billion dollars so if you go and take 1.8 billion, then it means that with the fall in price, you should be aiming at 1.5 million metric tons of cocoa, meanwhile our forecast is to do 850,000 metric tons and that is why we going for this,” he explained.
Mr. Aidoo stated that the projection is manageable for COCOBOD to raise the funds and pay back the loan.
“Don’t forget that the repayment of the loan starts in February to August 2018. The payment will be done from the cocoa beans,” he said.
Touching on the interest rate, Mr. Aidoo was of the view that even though this year’s is low the syndicated banks could further reduce it next year due to the credibility of COCOBOD.
“Management of Ghana Cocoa Board wishes to assure all the 25 banks involved in the syndication that it is fully committed to meeting its obligations under this loan agreement and will take steps to enhance the assignments, collections and repayment processes associated with this facility”