Road Show for USD1,600,000,000 syndication loan facility

The 2014 Road Show for USD1,600,000,000 syndication loan facility - London ………..

Cocobod will provide Cocoa farmers with fertilizer and cocoa extension services……Dr. Opuni

At the 2014 Cocobod syndication loan presentation in London, CEO of Cocobod, Dr. Stephen Opuni told the meeting that Cocobod would introduce a free fertilizer initiative which will see Cocobod supplying free fertilizers to cocoa famers and aiding them in its application and utilization. Dr Opuni said because a substantial amount of cocoa farmers in Ghana are unable to afford and properly utilize fertilizer, Cocobod would use the services of cocoa extension farmers to educate the farmers on its proper application to ensure maximum yield.

The annual Cocobod finance facility syndication meeting was held in central London on 27th June and it was to meet the bankers as part of the process before the signing ceremony which takes place in September. The event entails a presentation to the prospective bankers with an overview of the Ghanaian macro-economic situation as well as provides a forum for Cocobod to pitch to prospective bankers a detailed business plan for the USD 1, 6000,000,000 trade finance facility they intend to raise.

Dr. Sylvain Broyer, Head of Economics at NATIXIS who presented a paper on Ghana’s macro-economic outlook said having joined the group of middle-income sub-Saharan economies in 2011; Ghana has already become “the biggest economy among its peers (USD 44Bn)”. He, however, added that economic growth since 2011 has been slowing down and the current rate of 6 % was below the long term average for emerging economies. He attributed this “widening of budget policy” to the “twin deficits of a significant rise in subsidies and payrolls in 2012 and interest payments in 2013.” He said lower prices for commodities such as gold and cocoa, the depreciation of the cedi and forex regulations introduced this year partly accounted for the slow growth.

However, Dr. Broyer said whilst inflation and dependency on commodities are clearly a weakness of the Ghanaian economy like many emerging economies, above-peer GDP growth, robust FDI inflows and a stable political system were positive aspects. He emphasised that unlike in many other African countries, regional trade was strong and that rapid changes in the fabric of the Ghanaian economy has resulted in higher potential growth of 6.4%.

Within the larger context of the country’s positive economic outlook indicators Dr. Stephen Opuni, CEO of Cocobod told the meeting that Ghana was confident of crossing the 2013-2014 projection of 800,000 tonnes to over 950,000 metric tonnes of Cocoa in this season. He said with good rain and a pilot programme of fertilizer application by cocoa extension farmers, he was positive of the increase in tonnage from the main and light crop seasons.

He said an amount of USD200million raised in March 2012 to support yield improvements programmes, quality assurance and warehouse expansion projects is currently being serviced and payment is expected to be completed in June 2015. He noted that Cocobod has always paid up on all its trade finance facilities not only because demand for cocoa remained robust, but also because of prudent fiscal management of its loans.

His Excellency Victor Emmanuel Smith, Ghana’s High Commissioner to the United Kingdom and Northern Ireland who attended the syndication meeting said he was encouraged by the macro-economic outlook on Ghana and wished both parties a successful and fruitful negotiation.

By: Information and Public Affairs Bureau Ghana High Commission, London