LBCs call for probe into ‘seed-fund guarantee’ policy

Licensed cocoa buying firms (LBCs) are optimistic that the finance ministry will set up a committee to review the ‘seed-fund guarantee’ policy introduced by Ghana Cocoa Board (COCOBOD).

The ‘seed-fund guarantee’ policy allows only universal banks to provide guarantee for LBCs.

According to the president of the Licensed Cocoa Buyers Association, Samuel Anane, the association believes the finance ministry would intervene quickly to bring hope to many of the LBCs that employ lots of Ghanaians, as well as save the industry from reduced cocoa production.

According to him, the LBCs, made up of 14 firms, would operate at full scale when the challenges facing their operations are adequately addressed.

He noted that though a number of LBCs have sacked some workers, there are still many Ghanaians being employed by these LBCs.

According to him, the industry has been struggling because of some of these challenges.

The LBCs have been requesting for a guarantee of between GH¢1.5 billion and GH¢2.5 billion since trade capital for the industry is huge.

However, the universal banks are not well liquidated enough to provide such guarantee for the LBCs.

Mr Anane urged COCOBOD to reverse the policy and give opportunity to the non-banks that are equally capable and ready to support the indigenous companies to grow.

However, companies such as Abapa, Aboafo, Akuotech, Farmers Star and Fortune Tree are said to have heaved a sigh of relief after securing some bank guarantees.

Mr Anane emphasised that cocoa production is in danger because some of the relatively bigger LBCs are struggling to meet the new directives, hence creating shortages of funds to purchase and pay cocoa farmers.

This situation is also influencing smuggling of cocoa beans in the first three weeks of the 2015/16 crop season.

Meanwhile, the LBCs have introduced an electronic mobile payment system to eliminate the field challenges caused by the purchasing clerks, district officers and other field officers.

This, it believes, will ease the challenges of the regulator and the industry, as well as provide security to the syndicated loan by the banks and COCOBOD.

The LBCs have so far invested over GH¢800 million into logistics, trucks and depots, employing over 20,000 Ghanaians directly and indirectly.