The Ghana Cocoa Board (COCOBOD) has signed a landmark deal for a-150 million dollar term-credit facility with the Royal Bank of Scotland (RBS) to enhance efficiency and boost Ghana's cocoa production.
It is the first time ever that a corporate organisation from the country has secured a loan from the international financial market and is widely seen as a demonstration of the growing confidence in the nation's economy. The facility with a one-year moratorium is repayable in three years.
President John Agyekum Kufuor witnessed the joint signing of the agreement by Mr Isaac Osei, Chief Executive Officer of the COCOBOD, Mr Tom Hardy, the RBS Head of Project Financing for Africa and the Middle East, Mr Joe Mensah, Managing Director of Ghana International Bank and Mr Dramani Egala, Chief Executive Officer of the Ghana Cocoa Marketing Company, in London yesterday.
Mr Osei said the money would be invested in three key areas to enhance productivity, quality assurance and the domestic value chain, through the application of improved farm level agronomic practices, modernisation of the Board's quality control laboratories to carry out chemical test analysis to assure quality and the building of a 100,000 tonne warehouse in Sekondi-Tarkoradi to reduce cost.
He said he was optimistic that the expected 30 percent increase in Ghana's cocoa production within the period would take care of the loan repayment.
The country last year hit an all-time record cocoa production of over 700,000 tonnes and this is projected to increase to about one million tonnes in the next three years.
President Kufuor noted that the COCOBOD had a track record of credit-worthiness and that past records showed it had always been able to meet all of its financial obligations to its lenders.
He said the government stood ready to assist the cocoa industry not only to raise output, but also the quality of the country's cocoa beans, which already was ahead of all other producers.
"The future of COCOBOD as a reliable partner in international commodity financing arrangement of this kind is therefore never in doubt."
President Kufuor said cocoa was a legacy bequeathed to Ghana by its forefathers and for that matter, the government was determined to do everything to ensure that it was handed to the next generation on a very strong footing.
The RBS Chief Executive Officer, Mr Johnny Cameron, said they were delighted to partner Ghana in the drive to improve the cocoa sector of the economy. This showed how a Western Bank could add value to emerging economies, he added.