Lenders have not declined $1.3bn cocoa loan for 2020 – Cocobod

Cocobod has refuted suggestions of lenders refusing to provide $1.3billion loan for the 2020 crop season due to the COVID-19 pandemic.

Chief Executive of Cocobod, Joseph Boateng Aidoo, stated that negotiations are on course and international lenders are committed to the cocoa syndication loan for the 2020/21 crop season.

Some international media outlets, including Reuters, had suggested that banks and other financial institutions have refused to underwrite the risk of the $1.3 billion.

Contrary to the publications, Mr Aidoo said: “Management wishes to draw the attention of the international community and the general public that these publications are false and do not reflect the current engagements between Cocobod and the banks and financial institutions”.

He said Cocobod has met its loan payment obligations for 2019 with no signs to suggest any challenges in paying future loans.

“It is worthy of note that Cocobod has prepaid the 2019 loan facility in June 2020,” he stated.

Ghana is the world’s second-largest cocoa producer behind neighbouring Ivory Coast.

Meanwhile, Mr Aidoo has lamented the huge cost of loans which he said was as high as $500million over the 27 years.

This covers financing, participation fees, legal fees and interest over the period.

He highlighted the need for the country to seek alternatives because “the money they give us is not free of charge. Once it is a loan, it means you have to pay”.

“It is in our own interests to try and wean ourselves,” He insisted. “We have to look into our future and go off loans”.

Mr Aidoo revealed that Cocobod is aiming at increasing yield from 500kiligrammes per hectare to 1000 kilogrammes per hectare with a target of 1.1 metric tonnes yearly by 2026.

Meanwhile, Board Chair of Cocobod, Hackman Owusu-Agyemang, has highlighted the need for Ghana to finance cocoa purchases domestically.

“The minister will like to see us able to pay for things ourselves and not go for loans despite the skilful accounting that has made us pay our syndicated loans three months ahead of time.”

Ghana is the world’s second-largest cocoa producer behind neighbouring Ivory Coast.

In 2018/2019, Ghana is estimated to have produced about 812, 000 tons of cocoa beans, a decrease from approximately 969, 000 tons in 2016/2017.