COCOBOD has assured cocoa farmers that despite the halt in the shipment of cocoa beans due to the closure of the ports, the process of signing the syndicated loan has not stalled.
COCOBOD says negotiations are still ongoing with financial institutions to raise the needed funds to finance the next crop season.
The closure of ports and various financial institutions worldwide due to the Coronavirus pandemic has caused various stakeholders to doubt the materialization of the syndicated loan.
Speaking to the media, the Chief Executive of COCOBOD, Joseph Boahen Aidoo said they are doing their possible best to land a deal.
“The processes usually start around February and so this is the time we should be doing syndication but because things are not normal and a number of interactions have been stalled, that doesn’t mean that the windows are completely closed.”
Mr Boahen added that the syndicated loan is likely to delay but it will surely materialize.
“As we speak, we are also doing a number of conference calls and we have rescheduled some of the meetings because there should have been some meetings outside Ghana that because of the COVID-19 challenge we cannot travel so we are doing conference calls and we are also rescheduling the program of syndication and so maybe the timing may delay.”
Meanwhile, COCOBOD has established a risk assessment committee to study price trends among other things as the impact of the coronavirus pandemic causes commodity prices on the global market to destabilize.
Mr Boahene Aidoo, however, indicated that the mandate of the risk assessment committee will be to lead reforms on best strategies for COCOBOD in these times.
Commenting on the impact of COVID-19 on cocoa prices, Joseph Boahene Aidoo maintained it would not affect the chain of operations of COCOBOD.
“Ghana COCOBOD is no exception. A number of ports in Asia and Europe have shut down and traders have closed their windows and some of our banks have closed. Business is not normal but that does not in any way constrain the operation of COCOBOD and our distribution to clientele and farmers. Nothing is halting our operation and purchasing of Cocoa is not stopped. We are making all efforts to get to pay our farmers. We have set up a committee to do a risk assessment to ensure that our farmers are paid and cocoa is being bought by the LDCs.”
Ghana’s cocoa sector employs some 800,000 rural families and produces crops worth about $2 billion in foreign exchange annually – considering the ravaging effects of the Coronavirus on economies, COCOBOD fears the future of small-holder cocoa farmers could be bleak
USD 600m syndicated loan
On Tuesday, November 12, 2019, the Ghana Cocoa Board, COCOBOD, completed a USD 600 million cocoa syndicated loan agreement with the African Development Bank (AfDB) in Johannesburg, South Africa, for the purchase of cocoa beans from local farmers during the 2019/2020 crop season.
The facility is a syndicated loan with the AfDB and the Credit Suisse Group AG to finance key components of COCOBOD’s productivity enhancement programmes.
The AfDB acted as the mandated lead arranger with a tranche of $250 million, Credit Suisse arranged the commercial tranche of up to $350 million, with the Industrial and Commercial Bank of China (ICBC), acting as a joint underwriter.
USD 140 million from the facility is earmarked to fight CSSVD, $50 million to build more cocoa warehouses, $200 million to promote the domestic processing of cocoa and $10.6 million to establish a database of cocoa farmers in the country.
In addition to this, another $40 million would be invested in irrigation services, $68 million in COCOBOD’s hand pollination initiative and $7.5 million to promote the domestic consumption of cocoa products.