COCOBOD signs US$1.3 billion syndicated loan for 2020/21 cocoa season

The chief executive of COCOBOD says the syndicated loan will help to purchase at least 900,000 tonnes of cocoa beans from Ghanaian farmers

Ghana Cocoa Board (COCOBOD) has signed a US$1.3 billion syndicated loan agreement with local and international banks for the purchase of cocoa beans for the 2020/21 season.

Parliament in August this year approved the syndicated loan, which carries an interest rate of 1.75%.

It is the first time that the consortium of cocoa loan banks has been obliged to sign an agreement virtually with Ghanaian officials, a move made necessary by the coronavirus disease. This year’s syndicate comprises 24 international and four local banks.

The Ghana News Agency reports that the international banks include Amro Bank, Bank of China Ltd in London, Standard Chartered Bank, Industrial and Commercial Bank of China, Ghana International Bank, Cooperative Rabobank, UA and Société Générale.

The local banks are Ecobank Ghana, Société Générale Ghana, Absa Ghana and Stanbic Bank Ghana.

Joseph Boahen Aidoo, the chief executive officer of Ghana Cocoa Board (COCOBOD), said the facility will be used to purchase at least 900,000 tonnes of cocoa from Ghanaian farmers and will be repaid over seven months.

He commended the funding institutions for their continuous trust in the workings of Ghana’s cocoa industry.

Boahen Aidoo said: “We have also returned this trust by ensuring that we never defaulted in repaying the loans since the 1992/1993 crop season, when the first one was signed. We have on several occasions repaid the loan ahead of schedule. The 2019/2020 syndicated loan, for instance, was repaid two months ahead of schedule.”

Better life for farmers

Boahen Aidoo said Ghana and Côte d’Ivoire have introduced the living income differential (LID) pricing mechanism, which has resulted in the addition of US$400 to the price of every tonne of cocoa sold by the two countries. This will ensure improved incomes and better livelihoods for farmers.

With the introduction of the LID, he said, President Akufo-Addo has announced a 28% increase in farmgate prices for cocoa for the 2020/21 crop season, which begins on 1 October. He said Ghanaian farmers would take home GHC660 per 64kg bag of premium-quality cocoa.

Boahen Aidoo said the government will continue to implement interventions to ensure a sustainable cocoa economy and improve living conditions for farmers.

The Minister of Food and Agriculture, Owusu Afriyie Akoto, thanked the financial institutions for the gesture and said that the loan will help Ghana to achieve her production targets.

He pledged to strengthen Ghana’s partnerships established to develop the agricultural sector, adding that the future for Ghanaian cocoa looks brighter.

Yuriko Noguchi, who spoke on behalf of the lead arrangers for the loan, praised the management of COCOBOD for their professionalism and commitment to the success of the cocoa business.

She pledged the financial institutions’ continuous support for COCOBOD to assist farmers to improve productivity and accelerate economic growth. 

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Ghana News Agency
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