Ghana Cocoa Board (COCOBOD) is to access an over-US$300million medium- term facility from international financial market to address fundamental challenges facing growth of the sector, the regulator has announced.
The sector is faced with lack of adequate irrigation facilities, poor road infrastructure linking the farming and market centres to warehouses and the ports, obsolete warehouses, overaged tree stock, perennial diseases and pests.
Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo, said this during a telephone conversation after a signing ceremony that secured a US$1.3billion syndicated loan for 2018/19 cocoa purchases from 21 international banks. The facility is to fund purchases of 900,000 metric tonnes of cocoa beans during the crop season, due to open in October.
The loan, signed in Amsterdam, is the largest pre-export soft commodity financing facility in sub-Saharan Africa and was over-subscribed by US$550million, representing about 42 percent, of 21 participating international banks in the syndication. It is expected that the repayment will be over 12 months, with an interest rate of Libor plus 0.625 percent.
Mr. Aidoo assured that for 2018/2019 season, the facility will be used for cocoa purchases and payment of other liabilities.
“By this event, Ghanaian cocoa farmers are going to be assured of fair and prompt payment for the fruit of their labour – that is cocoa,” he said.
He expressed his profound gratitude to the lead arrangers for their role in securing the facility, and for their commitment and dedication toward growth of the cocoa sector.
He thanked the consortium of banks and the international community for their confidence in the country’s cocoa sector and its entire economy.
“Over the past 25 years, we have consistently maintained our reputation of honouring our year-after-year syndicated loan repayment without a single default. This record in the financial market is remarkable,” he said.
He indicated that perennial pest and diseases, cocoa swollen shoot virus diseases, volatility of cocoa prices, climate change, poor road infrastructure linking producing communities to markets and service centres into the warehouses and ports are the fundamental challenges affecting the industry.
“Within the past months, we have been able to reverse the declining trends in our cocoa production in Ghana from 780,000 metric tonnes to 968,000 metric tonnes, and sustain the up-turn because of the cocoa productivity enhancement projects including hand-pollination that cocoa board introduced.”