By Gifty Arthur
The Ghana Cocoa Board (COCOBOD), is set to sign yet another US$1.8 billion syndicated loan from a consortium of European banks on the world financial market, to enable it procure tonnes of cocoa beans for the 2016/2017 crop season.
The signing comes off this Wednesday, September 21, 2016 in Frankfurt, Germany and it will be performed by the Chief Executive Officer (CEO) of the Board; Dr. Stephen Kwabena Opuni, and team of officers.
The latest signing, follows a successful completion of the last year’s loan by the Board.
An initial amount of US$1.8 billion was signed for by the Board, but the banks in April 2016, gave additional US$200 million, raising the loan to US$2 billion, however, the Board, last month completed payment to the delight of the bankers.
Parliament has again approved up to US$2billion for the 2016/2017 crop season, but COCOBOD, has again decided to secure only US$1.8billion in the meantime, and get the remainder, when it becomes necessary to sign for its operations.
Mr. Noah Amenyah, the Public Affairs Manager of the Board, confirmed the report to The Herald saying “this year’s signing will take place in Germany and the board will take a loan of $1.8billion even though Parliament gave approval for up to $2 billion. The position taken by COCOBOD will allow it to draw additional funds in the course of the year if it considered it necessary”.
He confirmed “Ghana Cocoa Board took a total loan of US$2billion last year for the purchase of cocoa beans and finance related activities. The full amount of US$2b was fully paid to the consortium of banks by the end of August 2016”.
Interest on the expected US$1.8 billion loan is pegged at 1.5 percent. The rate is described as a near dash, because many organizations that deal in cocoa products, especially chocolate manufacturers, according to industry players, find it extremely difficult to attract that low interest rate.
This has been attributed to the credibility the Board has exhibited over the last few years.
The Board, purchased some 850,000 tonnes of cocoa beans from Licensed Buying Companies (LBCs) during that season for the 2015/2016 crop season.
Dr. Opuni, who will be returning soon to the country after the signing ceremony, has been busy in Europe. He left Ghana to attend the European Cocoa Association Conference in Dubrovnik, Croatia, after which he will be traveling to Germany for the signing.
Previous acquisitions of the loans, were done in Paris, France.
In February this year, the banks sent out a delegation to Ghana to inspect roads the banks gave money to the board to rehabilitate in cocoa growing regions namely, Ashanti, Western, Brong Ahafo, Eastern, Volta and Central.
Globally, financial experts have long praised COCOBOD’s syndication process as one of the best long-running commodity-backed deals that continues to attract interest from dozens of financial institutions worldwide.
It has since the 1992/3 cocoa season, resorted to the international market in raising money to fund the purchase of cocoa beans from farmers through licensed LBCs.
The amount raised has risen from US$140million in the maiden attempt to peak of US$2billion in the 2010/11 cocoa season, the period the country grossed over one million metric tonnes of the crop. Since then, the process has become an annual affair that foreign banks look forward to.