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COCOBOD justifies $300m loan facility to pay cocoa bills

By Justice Kofi Bimpeh

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.

Read also: Cocobod requires GHC1.5bn to meet crop target

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.”

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