Ghana Cocoa Board, COCOBOD, has explained why it was necessary for the cocoa regulator to go in for a $300 million loan facility to pay off cocoa bills.
COCOBOD recorded a shortfall of 2 billion cedis in the previous harvest and needs 1.1 billion cedis ($223 million) to meet its commitments for the annual season through September, that’s according to a document that was submitted to lawmakers on Dec. 22.
The board is in talks with a syndicate of lenders including Cooperative Rabobank UA and Societe Generale SA to borrow the money at 295 basis points over Libor.
Some reports have described the cocoa regulator as a loss-making institution but the Manager at the office of COCOBOD Chief Executive Officer, Fifii Boafo said it will not be appropriate to refer to COCOBOD as a loss-making institution because every institution in the country has its challenges same as COCOBOD.
He added that the loan facility will be used to pay cocoa bills owed Bank of Ghana and it is also a move to reduce the high-interest rate they need to pay on loans from the Central Bank.
“I think it’s unfair for anybody to described COCOBOD as a loss-making institution, because we have our own challenges, it is not peculiar to COCOBOD, every organisation at a point in time has some challenges, we are taking the 300m dollars to pay for what we refer to as cocoa bills, cocoa bills generally refer to a loan we take from Bank of Ghana to finance our operations, if you look at the interest we are paying on those loans I think it is in one way or the other overburdening the institution, so we are of the view that we could secure funding that will come with a less burdensome interest rate.”