The Ghana Cocoa Board (COCOBOD) has completed the repayment of the $1.7 billion loan it raised from a consortium of banks in 2014 to finance cocoa purchases in the 2014/15 crop season.
The repayment of the loan started in February this year and ended last month, within which the board paid off the principal and the accumulated interest.
The completion of the payment paves the way for the board to make another entry into the global financial market to raise funds to support cocoa purchases in the 2015/16 season.
The Public Affairs Manager of the board, Mr Noah Amenyah, said in an interview in Accra that the 2014/15 crop season loan attracted an interest of one per cent within the period.
“The rate was one per cent and that was very good for a facility of this nature. I am not sure you can get such a rate anywhere currently,” he said.
History of cocoa loan
The COCOBOD has, since the 1992/3 cocoa season, resorted to the international market to raise money to fund the purchase of cocoa beans from farmers through licensed buying companies (LBCs).
The amount raised has risen from $140 million in the maiden attempt to peak at $2 billion in the 2010/11 cocoa season, the period the country grossed over one million metric tonnes of the crop.
In the current season, Mr Amenyah said, the board would be seeking to raise $1.8 billion to fund the purchase of about 850,000 tonnes of cocoa beans.
“The loan is expected to come on stream in the middle of September,” he added.
Beyond helping to augment the operations of COCOBOD, the loan would help stabilise the cedi, which has been facing serious depreciation in recent times, as well as shore up national reserves.
Ability to pay
Reacting to concerns that the board would not be able to produce enough beans to repay the loan, Mr. Amenyah said estimates showed that cocoa production would rebound this year after a sluggish performance in the last season.
As a result, he said, the board was confident of producing the needed quantity of beans to pay off the $1.8 billion loan it intended to take.
“From our estimates, we will be able to produce enough to pay off the amount we want to raise this season. Generally, the output fluctuates. When you have a bumper harvest this year, you don’t expect the output to be so strong the following season, but because output was not too strong last year, we expect it to rise this season,” he said.
He attributed the fluctuation in output to the aging nature of cocoa farmers and trees, increased number of diseased cocoa trees and illegal mining which competed with the cocoa plants for land.
“Fortunately, we have interventions in place to help correct some of these challenges. The cocoa rehabilitation programme has been ongoing and the success is already beginning to show. We have already started the free distribution of 50 million improved seedlings to replace aged and diseased trees,” he said.
Concurrently, Mr Amenyah said, the board was also mentoring some youth to cocoa production to help replace aging cocoa farmers, which has been identified as a major challenge to cocoa production.
“Already, over 20,000 youth farmers had registered and were being assisted to cultivate various acreages of cocoa to augment those operated by the aged”, he said.
Source: Graphic