Ghana Cocoa Board (COCOBOD) has secured a US$1.3 billion cocoa syndicated loan for 2018/2019 crop season.
The first tranche of the amount which is $650 million is expected to hit the account of the Bank of Ghana in the next two weeks.
It follows the successful signing of cocoa syndicated loan in Amsterdam with 21 banks which include ABN Amro Bank, Bank of China, ICGC London Branch, Standard Chartered Bank which the facility agent and Ghana International Bank the Receiving Bank.
The facility will ensure that adequate funds are made available to the Licensed Buying Companies (LBCs) to pay cocoa farmers promptly for their produce during the crop year.
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Mr. Aidoo speaking at the signing ceremony told the banks that by appending their signatures to this facility means they are not only sealing the deal, but they are also indicating their confidence in the cocoa industry and, by extension, the entire economy of Ghana.
“We are indeed encouraged by this confidence reposed in us and want to assure you that it is not misplaced. Over the past 25 years, we have consistently maintained that exquisite reputation of honouring repayment of year-after-years syndicated loan without a single default. This record in the financial market is remarkable.
“But whilst painting such enviable credentials, we must not be deceived that all is rosy in the cocoa industry back home. Perennial pests and diseases, the ubiquitous Cocoa Swollen Shoot Virus Disease, volatility and fall of cocoa prices, climate change and poor road infrastructure linking our producing communities to markets and service centers and to the warehouses and the ports are fundamental challenges that contrive against the industry.
“Within the past dozen and half months, we have been able to reverse the declining trend of cocoa production in Ghana from 778,000 metric tonnes to 968,000 metric tonnes, and sustained the upturn because of the productivity enhancement programmes (PEPs – i.e. hand pollination and mass pruning) which COCOBOD introduced along with our conventional CODAPEC and HI-TECH measures.”
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“Even though the annual facility comes in handy to facilitate these PEPs and payment to cocoa farmers, hardly can it be relied upon for addressing the fundamental challenges. COCOBOD, for instance, has programmed to undertake irrigation on cocoa farms, rehabilitation of diseased and moribund farms, expansion of warehouse capacity, improvement of the conditions of roads that link cocoa communities and promotion of domestic consumption of cocoa. These are largely capital-base projects which require medium to long-term financing and not annual facility. The imperative is that so long as these fundamental challenges remain, the full and real measure of the annual facility cannot also be realized.
“It was against the foregoing backdrop that we made a call for medium to long-term financing. I am happy to note that some of our friends in the international financial sector have responded positively. We urge all others who may not have been aware of this call to join this laudable endeavour. In essence, the annual facility must be complemented with medium to long-term facility if the former were to bring real and meaningful impact onto the cocoa industry in Ghana.
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“Let me take this opportunity to pay tribute to our gallant cocoa farmers who have, through their toils, enabled us to achieve this enviable record in the past 25 years. Their resilience in the face of all the challenges has ensured that we continue to produce enough cocoa of premium quality to fulfill our contractual obligations to our trading partners. If you and I are here today, then it is because of our cherished cocoa farmers. Let us together, therefore, assist them to make the industry a sustainable one,” Mr. Aidoo stated.
Joseph Boahene Aidoo however assured all the Banks participating in this syndication that Ghana Cocoa Board is alive to its obligations under this loan agreement and willfully discharge them as always done.