It’s a pity we have to borrow to buy our main cash crop, cocoa – IEA boss

Senior Economist and Director of Research at the Institute of Economic Research, John Kwakye, has decried the current state of Ghana’s cocoa sector.

According to him, having to borrow to finance cocoa purchases, one of the country’s main exports is saddening.

He suggested that the Bank of Ghana and the Cocoa find ways to raise money instead of borrowing like it is currently doing.

He wrote on his X page: “Isn't it a pity that, as a country, we have to go outside to borrow money to purchase our main cash crop, cocoa? Since the crop is self-financing, can't BoG and Gov't find innovative means of raising the money domestically? Let's think outside the box!”

There has been some form of unrest in recent times after reports of the government’s inability to secure the yearly syndicated loan due to banks’ skepticism over the country’s debt levels.

In a press release on November 10, 2023, it said: “COCOBOD planned a two-prong financing for the 2023/2024 Crop Season in an effort to diversify its source of funding for the annual cocoa purchases. The strategy was, therefore, to use a refinancing arrangement with the international buyers to raise an amount of US$400 million for purchases at the beginning of the Season in September 2023.”

“These initial funds were expected to be augmented by an additional US$800 million loan from a syndicate of lenders by the end of November 2023. After engagements with buyers for several weeks, the arrangement was however discontinued. Thus, since the beginning of the Season, cocoa purchases have been financed with noncollateralized cocoa sales proceeds,” parts of the statement read.

COCOBOD insisted that it is still in the process of securing the syndicated loan for the 2023/24 Crop Season.

“As a matter of fact, the Board has so far received a firm response from our bankers in this regard, and the Cocoa syndicated Loan has been laid in Parliament for consideration and approval.

We wish to use this medium to assure our stakeholders that the necessary arrangements have been made to secure enough funding for cocoa purchases for the year under review,” the board noted.

Isn't it a pity that, as a country, we have to go outside to borrow money to purchase our main cash crop, cocoa? Since the crop is self-financing, can't BoG and Gov't find innovate means of raising the money domestically? Let's think outside the box!

— J. K. Kwakye (@JohnKwabenaKwa1) December 1, 2023

SSD/NOQ

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