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COCOBOD signs US$1.5 billion syndicated loan for 2021/2022 cocoa crop season 

Joseph Boahen Aidoo, COCOBOD syndicated loan

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The Ghana Cocoa Board (COCOBOD) has signed a US$1.5 billion syndicated loan for the 2021/2022 cocoa crop season. 

The agreement will boost the cocoa sector’s speedy recovery from the devastating effect of the COVID-19 pandemic

Ghana’s cocoa production beats a 10 year-record production of 1, 024,000 metric tonnes for the 2010/2011 crop season. 

The loan also offers some hope for the stability of the Ghana cedi on the forex market. 

Speaking during the signing of the syndicated loan, Dr Owusu Afriyie Akoto, the Minister of Agric said the money will help in the implementation of policies for the cocoa sector.

He said, “This year’s syndication facility – participation of 28 banks is an affirmation of the confidence of the international financial sector and COCOBOD in the Ghanaian economy. 

“The government’s long-term economic policy has always led to the facility being oversubscribed and this year is no exception.”

Dr Afriyie Akoto added, “We are hopeful that these efforts will continue to enhance cocoa production, processing, marketing and consumption to achieve competitive remunerative returns in a sustainable cocoa industry in Ghana.”

Joseph Boahen Aidoo, the chief executive officer of COCOBOD said, “The future of Ghana’s cocoa sector is indeed blissful, I am very optimistic about that. As we commit more resources in the National Cocoa Rehabilitation programme which begun three years ago, we get even more optimistic that the sector is going to be remarkably transformed in the medium term; that more gains would be achieved, that the sector would be attractive to the youth, that the livelihoods of our dear cocoa farmers are going to be improved and that the cocoa sector in Ghana is going to assume a more thriving and sustainable trajectory.”

Historic cocoa production

The signing also comes on the back of some positive developments in Ghana’s cocoa sector.

Boahen Aidoo said, “We have broken the existing record which was 1.024,000 metric tons [in 2010/ 2011 crop season] and now the new record is 1,330,122.19 metric tons and mind you the season has not ended. The season will end on 30 September which means that Ghana will be heading to 1,060, 0000 metric tons.”

The syndicated loan facility, which is the largest deal in sub-Saharan Africa, will be used to finance cocoa purchases and related operational activities in the crop season.

COCOBOD exceeded its production target to reach a record 1.06 million metric tons for the 2020/21 season, beating the previous record of 1.024 million metric tons in the 2010/ 2011 crop season. Also, global demand for cocoa is projected to grow by 2.2% for the next crop season.

Since the 1992/93 crop season, COCOBOD has consistently and successfully, through the pre-export syndicated finance facility, obtained a receivables-backed syndicated loan each year from the international money market to finance its cocoa purchases.

The loan facility has an interest rate plus LIBOR of 1.75%, is repayable in seven calendar months and is projected to help purchase about 900,000 metric tonnes of cocoa.

The syndicated loan is expected to be used to finance cocoa purchases and related operational activities in the crop season.

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