Photo Credit: Ghanaweb
Ghana has turned to cocoa traders to salvage the financing gap created by delays in securing the regular syndicated loan for the purchase of cocoa beans in the 2023/2024 crop season, a publication by Reuters said on Tuesday.
Fiifi Boafo, Public Affairs Manager for Ghana Cocoa Board (COCOBOD), confirmed that the regulator of the cocoa industry has resorted to borrowing funds ranging between 150 million dollars and 200 million dollars from cocoa traders to finance its bean purchases for this season.
He explained that the unexpected development was due to delays in securing the vital syndicated bank loan.
Ghana, the second largest cocoa producer, launched the 2023/2024 season in September, instead of the usual October, hiking the farm gate price by more than 63 percent in a bid to boost farmer incomes and prevent beans smuggling to neighbouring countries.
However, the traditional syndicated loan secured each September to finance cocoa beans purchase from smallholder farmers has delayed causing a funding gap in resources for cocoa purchases.
Previous announcements indicated that COCOBOD would borrow 1.2bn dollars for this season’s operations. Of this amount, 800 million dollars was to be sourced from a consortium of lenders, while the remaining 400 million dollars comes from other funding sources.
In the interim, Boafo said the regulator turned to cocoa traders to fill the financing void, with the assurance that these funds would be repaid with the proceeds from the season’s harvest.
“We engaged with some of the buyers to give us capital for some of the purchases so that the capital is taken care of when we supply them with the beans,” he stated, without specifying the exact amount accessed from traders.
The COCOBOD spokesman revealed that parliament would this week commence the approval processes for the agreements concerning the 800 million syndicated loan to pave the way for COCOBOD to reach out to partner banks for the necessary formalisation of the loan agreements, ensuring the regulator’s financial requirements are met as the cocoa season runs.