Ghana Cocobod Needs $400 Mln After Loan Disappears -CEO

ABIDJAN, April 25 (Reuters) - Ghana's Cocobod needs around $400 million in bridge financing from the central bank to cover its operations for the remainder of the cocoa season after its annual syndicated loan ran out early, the industry regulator's chief executive said on Tuesday.

Each September, Cocobod secures an international syndicated loan to finance licensed buyers who purchase cocoa from smallholders for export. It raised $1.8 billion for the 2016/17 season, but Cocobod's new chairman Hackman Owusu-Agyemang said in March the loan had been used up.

"We are looking for about $400 million now to finish with our operations. We're going to the central bank, the Bank of Ghana, to take out some cocoa bills," Cocobod CEO Joseph Boahen Aidoo told Reuters in an interview in Abidjan, Ivory Coast.

"This is a bridge financing arrangement. We should be able to pay it back before the next crop season."

The funding shortfall has added pressure on the government of Ghana, the world's number two cocoa producer, which is seeking to stabilise its finances under a three-year $918 million International Monetary Fund programme.

Aidoo said much of the missing loan money had gone to road construction contracts ahead of presidential elections last year which saw incumbent President John Dramani Mahama defeated by challenger Nana Akufo-Addo.

"A lot of money was committed to cocoa roads at the expense of other operations, and that is what has brought about the difficulty we are having now," he told Reuters.

"This was because it was the time of elections, and normally the president goes around promising roads."

Aidoo, who was appointed by President Akufo-Addo, said the previous Cocobod leadership had awarded more road contracts than the regulator could pay for and many remained unfinished.

Authorities in Ghana have launched an investigation into how the loan money was used, and Aidoo declined to say if he believed there had been any wrongdoing.

MORE COORDINATION
World cocoa prices have plunged by about a third since last year, with New York futures touching their lowest level in nearly a decade last week and the London market hitting a four-year low.

The price slump has already squeezed the government coffers of the world's biggest growers in West Africa, with Ghana alone missing out on around $1 billion in export revenues.

Representatives of cocoa producing nations meeting in Abidjan for an emergency meeting of the International Cocoa Organization have pledged to coordinate their production strategies to better control supply.

Aidoo said Ghana was already in direct talks with neighbouring Ivory Coast, the world's top producer, to increase collaboration.

"We are trying to harmonise how we do our systems for trading so we can use that to monitor the market and coordinate the sale of cocoa," he said.

The two nations together produce around 60 percent of the world's cocoa.

"There's no need for Ghana and Ivory Coast to have different systems. They need to use same system. Even pricing, we don't use the same pricing." (Reporting by Joe Bavier, editing by Louise Heavens and Susan Thomas)