The Minister of Food and Agriculture, Dr Owusu Afriyie Akoto, says the financial challenges facing the Ghana Cocoa Board (COCOBOD) have worsened in recent times, forcing the board to now borrow from the Bank of Ghana (BoG) to be able to pay farmers for cocoa purchased.
The loans are taken at interest rates that range between 21 per cent to 25 per cent, the minister said after swearing in the board of directors of the Cocoa Marketing Company Limited.
While declining to state how much had been borrowed so far, Mr Afriyie Akoto said the depletion of COCOBOD's coffers had combined with a steady decline in cocoa prices to make it difficult for the board to finance its operations.
Cocoa prices, which averaged $3,000 in 2016, have slumped to around $1,800 in August, this year.
The price slump has already cost the country some $1 billion over the last seven months, the minister said but added that the government resolved not to reduce the amount paid to farmers for their produce.
He blamed the board's predicament on mismanagement and gross disregard for financial prudence by the previous administration, stating that such inactions had placed the cocoa sector in "a mess."
Although the previous administration had budgeted to spend some $1 billion on cocoa roads, he said it ended up signing contracts in excess of $5 billion, raising questions on the oversight roles of the previous board of directors.
He disclosed that an audit of the cocoa roads project was currently underway to help ascertain the financial burden and possible acts of violations of the law.
Once concluded, he said his ministry will take the necessary actions to help forestall a repeat in the future. He also advised the current board to be prudent in their management of resources to help revive confidence in the cocoa sector. COCOBOD which oversees the cocoa sector was recently moved from the Ministry of Finance of Food and Agriculture.