The Herald, has picked up disturbing reports at Ghana Cocoa Board (COCOBOD), saying things are not looking tidy and has created credibility challenges for the institution, especially in the eyes of some of the foreign banks it deals with.
There are reports of inflation of contracts prices, payments for ghost contracts, which in some instances, have led to the interdiction of some senior officers among other financial irregularities.
Firstly, management is reported to have dished out road contracts valued over US$2.5 billion to local companies, but has not been able to secure funding for it.
Secondly, COCOBOD, is heavily indebted to Local Buying Companies (LBC) in the region of GHC450 million for cocoa beans it received from them during the last crop season and unable to pay.
These among other things The Herald is informed, has forced one of the European banks; Standard Chartered Bank, which is involved in syndicated loans, to withdraw at last minute, citing lack of credibility in the management of the board.
This, the paper picked up, is affecting the US$1.3 billion COCOBOD has projected to raise from the syndicated loan.
While some insiders say the loan is in limbo because of the board’s reported transparency and accountability issues, others have indicated that the money will come, but will fall short of US1.3 billion.
The 2021 Auditor-General’s report, has charged Ghana Cocoa Board (COCOBOD) to cut back on its increasing finance cost, following the swelling indebtedness seen in the past years.
The report noted that COCOBOD, has a relatively huge loans portfolio totalling GH¢12.301 billion as of the end of the 2019/2020 financial year.
“We urged management to deploy and implement effective plans and strategies that would lead to the reduction of the Board’s [COCOBOD] indebtedness within the medium to long term,” the report said.
However, the report identified that the absence of sustainable debt plans coupled with the lack of effective long-term cost control measures resulted in this state of affairs.
It further stated: “We also noted from our review that, the Board did not provide us any effective plans to reduce its debt burden into the future,” warning that the situation could lead to crippling of the cocoa industry.
Also, the report said: “we noted during our review of the 2019/2020 approved budget statement that, COCOBOD expended an amount of ¢230.70 milion on the principal repayment amount of a 10-year loan with Bank of Ghana (BoG) which was not included in the approved budget for 2019/2020 financial year. We advised Management to ensure that all the Board’s activities are adequately provided for in its estimates and ensure that it operates within its approved budget”.
Additionally, the 2021 Auditor General’s Report also charged COCOBOD to engage the Ministry of Finance to recover ¢2.25 billion that the government owed the cocoa regulator as of September 30, 2020.
This was because of supply of cocoa beans to Genertec International Corporation (GIC), government’s revenue support on producer price of cocoa and excess export duties paid by the COCOBOD for GIC on cocoa beans exported.
It also said its review of the recovery of seed funds from Licence Buying Companies (LBCs) revealed that management could not recover seed funds and accrued interest totalling ¢47.024 million from LBCs for more than four cocoa seasons contrary to the provisions in the law.
“We urged management to recover the amount from the banks that guaranteed these facilities for the companies failing which the Board should pray the court to lift the veils of incorporation of these defaulting companies to demand the total indebtedness from the Directors and personalities behind these companies”.
The report identified that the company’s receivable aging report revealed that a total of $179.572 million debt was overdue as of 30th September 2020.
“To effectively manage the recovery of the debts, we recommended to Management to institute innovative measures to collect the debt”.
The report noted that QCC invested an amount of¢500,000 in a vehicle loan investment account at the UMB Investment Holdings Limited (UMB IHL) contrary to the investment policy of Cocoa Board.
It further recommended to Management to avoid placing the Company funds in similar investment houses.
The report said the lack of effective control over the utilisation and accountability of monies lead to unretired imprest totaling ¢878,586 by November 30, 2020.
It therefore recommended that the amount be converted into advances against the officers and recovered from their salaries.
