Cocobod officials have been tasked to raise capital in the domestic markets
The Board Chairman of Ghana Cocoa Board (Cocobod), Hackman Owusu-Agyemang, has urged the cocoa regulator to work hard to raise funds from the domestic capital market to finance its programmes and activities in the ensuing years.
According to Mr. Owusu-Agyemang, as the Board Chair, their objective is to wean Cocobod from its appetite of borrowing from the external market and rather raise its funds from the domestic capital market.
Speaking at Cocobod’s signing ceremony of the US$1.3bn syndicated loan for the purchase of cocoa beans for the upcoming crop season, in Accra, he said: “as we move forward, we should be able to see how best we do it on our own. Ghanaian banks can do syndication.”
The syndicated loan amount of US$1.3bn is meant to finance the purchase of cocoa for the 2020/2021 crop season by Cocobod.
The amount represents a Trade Finance Facility between the Cocobod and a consortium of banks and financial institutions.
Four Ghanaian banks are part of the consortium – they are Absa, Ecobank, Societe Generale and Stanbic Bank, which have all been challenged by the board chair of Cocobod to join forces to ensure they support the regulator to borrow locally.
Disbursement
Chief Executive Officer of Cocobod Joseph Boahen Aidoo indicated that the first tranche of an amount of US$650m is expected to be released by the first week of October.
He also hinted at the possibility of Cocobod raising extra funds to meet the 900,000 metric tonnes (mt) for the 2020/2021 crop season.
“The US$1.3bn can move us up to some stage because we are aiming at 900,000mt. If you look at the price of cocoa including the LID [living income differential], it means when we produce around 500,000mt that alone will consume all the US$1.3bn and if that happens, it means we have to go for extra money.
But the banks have assured us that the whole thing has been oversubscribed by some US$250m so we still have room to go for more money to top up.”
The terms of the financing include the facility amount of US$1.3 bn, an interest rate of one-month LIBOR+ 1.75 percent per annum, a commitment fee of 0.62 percent per annum and upfront fees of 1.25 percent flat.
Cocoa production had been forecasted to be 900,000 metric tonnes for the 2020/2021 crop season.
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