COCOBOD Secures 1.8bn Dollars Syndicated Loan
The Executive Officer of the Ghana Cocoa Board (COCOBOD), Dr. Stephen Opuni, has secured a $1.8 billion world’s largest soft commodity loan from the international money market to boost cocoa purchasing and production.
He said COCOBOD is confident of achieving its production target of 850,000 to 900,000 metric tonnes in the 2016/2017 cocoa season which is set to begin in October 2016.
Dr. Stephen Opuni made this revelation at a signing ceremony of the US$1.8 billion receivables-backed trade finance facility for the 2016/17 cocoa season held in Frankfurt, Germany.
The 1.8 billion cocoa syndicated loan which is the 24th Trade Facility that Ghana Cocoa Board and the Banks have successfully arranged since the inception of this loan arrangement in 1992/93 would be used to purchase cocoa beans for the 2016/17 crop year and finance other related activities.
Dr. Opuni duly signed for 1.8 billion dollars after Parliament has approved up to US$2 billion for the 2016/17 crop year.
He however indicated that when the crop performs better and requires further funds, the facility will allow for an additional US$200 million.
According to him, COCOBOD signed for $1.8 billion at the beginning of 2015/16 crop year and later took an additional $200 million from the consortium of banks bringing the total amount to $2 billion.
Dr. Stephen Opuni posited that despite the drop in the production output as a result of the unfavorable climate conditions, COCOBOD showed its creditworthiness after the $2 billion was fully paid at the end of August 2016.
The all-Inclusive cost
The loan facility comes with an all-inclusive rate of 1.468 which is a bit high than the last year’s 2015/16 rate of 1.19 percent.
The facility has a 4-months’ moratorium and seven months repayment period which starts in February 2017 and expected to be completed in August 2017.
Impact on the economy
Dr. Stephen Opuni stated that the inflows from the syndicated loan will bring in the much needed dollars to the Ghanaian economy and help stabilize the value of the Ghana Cedi.
He added that this loan facility will ensure that cocoa farmers in Ghana receive prompt payment for their produce.
Major Challenges
Dr. Stephen Opuni emphasized that the Global Cocoa industry and particularly Ghana is confronted with some challenges but not limited to declining soil fertility, ageing cocoa farmers, overaged cocoa farms, lack of interest by the youth to go into cocoa farming, climate change, cocoa swollen shoot virus and other pests and diseases that attack cocoa farms.
According to him, product target for 2015/16 cocoa season has been adversely affected by the severe and prolonged dry weather conditions that lasted from December 2015 to March 2016.
Government interventions
He indicated that as part of efforts to improve upon productivity, COCOBOD is providing free hybrid seedlings to their cocoa farmers.
“Last year we distributed 50 million seedlings equivalent to about 42,000 hectares of cocoa farm to cocoa farmers,” he stated.
Dr. Opuni added that this year they are giving out 60 million seedlings equivalent to 50,000 hectares of cocoa farms to their cocoa farmers.
“As we continue this programme annually, farmers will be supported to create about 500,000 hectares of new cocoa farms over the next 10 years,” he intimated.
According to him, this productivity package has also attracted and motivated over 40,000 young men and women to engage in cocoa farming.
Dr. Opuni said all these initiatives are expected to add another 500,000 to 750,000 metric tonnes of cocoa after the next 10 years to their current yield.
He added that COCOBOD is supporting the local cocoa farmers to improve upon soil fertility of their cocoa farms through the free fertilizer distribution programme.
“Moreover, we continue to provide free of charge fungicides and insecticides to cocoa farmers for spraying their cocoa farms against pests and diseases,” he stated.
Dr. Opuni added that apart from teaching farmers to adhere to good agronomic practices, COCOBOD also educates the farmers on the methods of early detection and eradication of CSSV affected cocoa tress.
According to him, COCOBOD is assisting to provide new schools and also rehabilitate old ones in cocoa growing communities.
To mitigate the effects of climate change, he emphasized that COCOBOD is collaborating with the Forestry Commission of Ghana and Ministry of Lands and Natural Resources to promote Agro forestry systems and to educate the cocoa farmers to engage in environmental friendly practices on their farms.
Speaking at a press conference in Accra, the Public Affairs Manager of COCOBOD, Noah K. Amenyah said, a total of 24 banks were involved in this year’s facility with lead arrangers and Fidelity Bank as the only local bank.
The lead arrangers numbering eight includes viz. Deutsche Bank AG, Natixis, Nedbank Ltd of South Africa, Rabobank, Standard Chartered Bank, Societe Generale (SG), The Bank of Tokyo-Mitsubishi UFJ Ltd and DZ Bank as co-arranger.