US$800 million syndicated loan signed: First draw down soon — COCOBOD CEO
After a long wait, Ghana Cocoa Board (COCOBOD) has eventually signed the US$800 million loan facility with syndication of banks for the purchase of cocoa in the 2023/2024 crop season, the Chief Executive Officer, Joseph Boahen Aidoo, has confirmed to the Graphic Business.
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He, however, noted that the board was awaiting the first drawdown in due course.
Mr Aidoo explained that the delays in securing this year’s facility were because the banks were waiting for some documents to be completed before signing their part.
“But I can confirm to you that it has now been signed by both parties and we are waiting for the first drawdown.
“We assure the public that the first drawdown will come in any moment from now, once I say any moment from now, you should take it from me,” he said in an interview with the Graphic Business on the sidelines of a presentation to some cocoa farmers.
He said all documents have been signed, adding: “If you are dealing with about 30 banks, it takes time for them to mobilise the money so the first drawdown will soon drop.”
Interest on loan
This year’s facility is coming at an interest of eight per cent, the highest since the start of the cocoa syndicated loan.
Commenting on this, Mr Aidoo said the interest was expected due to the current global challenges, which had changed the dynamics of the market.
“The market is not as it has been in the past, globally, the cost of borrowing has gone up so it’s not just COCOBOD,” he stated.
On whether COCOBOD had faced any challenges in purchasing cocoa beans due to the delays in securing the facility, the CEO said it had other means of raising money for the Licensed Buying Companies (LBCs) to go to the market.
He said COCOBOD had already bought a lot of cocoa during this cocoa season despite the delays in securing the loan.
Commenting on some challenges in the sector, he said COCOBOD, in the last two years, had not been able to meet its production target of 800,000 metric tonnes (mt) due to smuggling.
“We have been doing around 680,000mt but for the smuggling, we should be doing around 850,000mt. Last year, for instance, we should have done 900,000mt, but we lost over 150,000mt through smuggling.
“People will say the market mechanism, such as prices, is a factor but we should know that in those countries where the cocoa is smuggled, they don’t do anything for the farmers but in our case, we provide a lot of incentives for the farmers,” he pointed out.
He said COCOBOD undertook free mass spraying, bought machines for the farmers, and hired about 48,000 sprayers every year to spray their farms.
“So when we spend all that and at the end of the day, the cocoa is smuggled to neighbouring countries where there is no regulation, it is not the best.
“Togo is a free market and a cocoa black market and that is where the cocoa from Ghana is taken to,” he lamented.
Cocoa rehabilitation programme
Mr Aidoo said at the moment, COCOBOD had secured a loan from the African Development Bank (AfDB) to implement the cocoa rehabilitation project.
He said the board was using the loan which had to be repaid to rehabilitate the farms free of charge for the farmers.
“We cut, plant and maintain the farms for them. So if the cocoa comes and it’s been sent to Togo to the black market, it’s very painful and something drastic ought to be done.
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“We are doing our best and we need the support of everyone. We have put in place measures to improve productivity. When we came, yield per acre was less than three bags but now we have moved to about six bags per acre.
“We even have some farmers doing about 20 bags per acre so we are doing our best, but after all that, if it’s not manifested in the production, it’s not the best,” he explained.
Situation in Volta Region
The CEO said the situation in the Volta Region was worse as available data indicated that total purchases for this year from the region were just 874 tonnes.
He said for a region, which had the potential to give the country about 10,000mt on cocoa, it was unfortunate that they were doing less than 10 per cent of that.
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“From February to October this year, we have not bagged a single cocoa from the Volta Region.
“I am a cocoa farmer myself and as of December 8, 2023, I have produced 81 bags of cocoa, which means that I am producing more than all the farmers in the region,” he noted.
He said that was because all the cocoa being produced in the region was being smuggled to Togo.
Mr Aidoo, therefore, appealed to the media and all stakeholders to help COCOBOD in the fight against smuggling.
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