The Ghana Cocoa Board is on course to sign its US$1.3 billion syndicated loan in September despite the COVID-19 pandemic which has brought economic activities around the world to a standstill, the Chief Executive Officer, Mr Joseph Boahen Aidoo, has said.
He said the process was moving steadily, with everything on schedule.
Responding to earlier reports that COCOBOD was unable to raise its planned US$1.3 billion through a syndicate of banks due to perceived risks associated with the COVID-19 pandemic, he said those reports were not accurate and did not reflect the current state of engagements between COCOBOD and its financial partners.
The chief executive was speaking at the launch of the US$600 million syndicated loan facility it signed with a consortium of development finance institutions to enhance productivity in the sector.
“It is important that I inform you that COCOBOD has paid its 2019/2020 loan facility in this present month of June 2020, three months ahead of schedule, even in this time of COVID-19.
“And so with respect to the US$1.3 billion syndicated loan, COCOBOD issued Requests for Proposals (RFP) in February 2020 to international banks to raise the funds for the 2020/2021 cocoa purchases. On the 12th of June, 2020, the financial institutions, including COCOBOD’s traditional banks, submitted their proposals. Evaluation of the proposals was held on 18th June, 2020 by an in-house committee chaired by the chief executive, with representatives from the Ministry of Food and Agriculture, the Ministry of Finance and the Bank of Ghana,” he explained.
He said COCOBOD was currently negotiating the terms of the proposals with the banks, which was the normal practice.
“Once the terms are finalised, all due processes will be followed through to their logical conclusion, up to the signing of the facility which is expected in September 2020,” he stated.
US$600 million facility
Mr Boahen Aidoo also indicated that the board had received the first tranche of US$200 million out of the US$600 million syndicated loan facility it signed with a consortium of development finance institutions.
He said the loan would support COCOBOD to strengthen the cocoa value chain and help alleviate poverty by increasing productivity and promoting a progressive cocoa consumption environment.
“I must put on record that with our own resources, significant progress has been made in our collective resolve to implement various Productivity Enhancement Programmes (PEPs) to increase yield per hectare to at least 1,000 kilogrammes.
“For instance, the 2020 Mass Pruning Exercise which began two months ago has been excellent. I am happy to indicate that we have achieved 100 per cent coverage of farm area, giving more prospects for higher yields,” Mr Aidoo stated.
He said the Cocoa Swollen Shoot Virus Disease programme (CSSVD), which was in its second year in the Western and Eastern regions, had seen the rehabilitation of several hectares of diseased farms.
“For the 2019/20 crop year, we started with some 37,850 hectares of diseased farms in both regions. Large proportions of the affected farms are presently at various stages of rehabilitation. It is only a matter of time before they become productive again,” he noted.
The CEO assured the public that the loan would be used for the purpose for which is was contracted.
The Ghana Cocoa Board (COCOBOD), in November last year, signed a $600-million loan agreement with some development finance institutions, including African Development Bank (AfDB), the Japan International Cooperation Agency (JICA), the Development Bank of Southern Africa and Casa Depositi e Prestiti Spa.
Others included the Credit Suisse AG and the Industrial Commercial Bank of China.
AfDB acted as the mandated lead arranger with a tranche of $250 million, Credit Suisse arranged the commercial tranche of up to $350 million, with the Industrial and Commercial Bank of China (ICBC) acting as a joint underwriter.