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22.09.2004 Business & Finance

COCOBOD secures 850 million-dollar loan

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Accra, Sept. 22, GNA - Ghana Cocoa Board and a consortium of 36 banks, including four Ghanaian banks, on Wednesday signed an 850 million-dollar trade finance loan for the purchase of cocoa for the 2004/2005 season.

The agreement was signed by the Chief Executive of Cocobod, Mr Kwame Sarpong, representatives of the banks and the Minister of Finance and Economic Planning, Mr Yaw Osafo-Maafo.

Sherazam Mazari, Chief Executive Officer of Standard Chartered Bank Africa Region, one of the lead banks of the syndication, said the banks gave out the money because of the exemplary performance of COCOBOD. "The sheer size of the loan facility is the confidence that the financial market has in Ghana and COCOBOD despite the risk in emerging markets as well as political situation in most Africa," he said at the signing ceremony in Accra.

This is the first time a syndicated loan agreement was signed in Ghana since COCOBOD started borrowing from the private sector in 1994 to finance the purchase of beans.

Mr Kwabena Quansah, Managing Director of Barclays, said despite the usual uncertainties, the facility was oversubscribed by 415 million dollars.

This, he said, was due to the good debt service record of COCOBOD coupled with quality and competent management of its viable export programme.

Mr Sarpong said since 2001 the company had witnessed over subscription of its call for funds to finance purchases, citing good management practices and farmers' response to initiatives as reasons for the growing confidence of banks in the company.

The country has recorded the highest volume of over 700,000 tonnes, representing a 30 per cent rise over the long existing record production of 580,000 tonnes in the 1964/65 cocoa year.

Mr Sarpong asked local companies to fine-tune the local payment system, especially payment using the Akuafo cheques.

Mr Osafo-Maafo said the government attached a great deal of importance to the cocoa industry and its contribution to the national economy.

It is in this direction that the government had pursued consistent policies and strategies towards the continued improvement of the industry and the lives of farmers as well as to enhance the sector's contribution to foreign exchange receipts.

Examples of such policies include increasing the cocoa farmers' share of the FOB price as a reward for their hard work and contribution, instituting bonus payments and controlling diseases and pest through mass cocoa spraying scheme as well as building of feeder roads in the farming communities.

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