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02.08.2019 Business & Finance

Gov’t Looks For $1.5b To Buy Cocoa Beans

By News Desk
Gov’t Looks For $1.5b To Buy Cocoa Beans
LISTEN AUG 2, 2019

Government is seeking an amount of 1.5 billion dollars for the purchase of cocoa beans for the 2019/2020 crop season.

According to a motion tabled in Parliament, COCOBOD wants a receivables-backed Trade Finance facility from a consortium of banks and financial institutions.

The motion is expected to be approved today, Friday, before Parliament ends its second meeting for this session.

In a parliamentary report, in 2018 the Ghana Cocoa Board (COCOBOD) said it required $1.5billion to address its financing gap for the 2018/2019 crop season.

This was contained in the Finance Committee report on the terms of a medium-term receivables-backed trade finance facility between Ghana Cocoa Board (as borrower) and a consortium of banks and financial institutions (lenders), with government (as guarantor) for an amount of US$300million to refinance cocoa bills for the 2018/2019 crop season.

Additionally, US$1.5m was waived as stamp duty on the loan facility.

Explaining the need to address that financing gap to parliament during the approval of the facility, the Chief Executive Officer of Cocobod, Joseph Boahen Aidoo said: “In order to address the financing gap, Cocobod has put in place a number of mitigating measures, including cutting down its operational costs.”

Parliament last December approved a US$300million loan for Cocobod to raise additional funds.

The trade facility was to enable Cocobod to raise adequate funds to refinance cocoa bills from the 2018/2019 cocoa season.

The cocoa industry has contributed significantly to the economic development of Ghana over the years. Cocoa contributes about a quarter of Ghana's Gross Domestic Product (GDP).

The industry has over the years created employment for millions of Ghanaians and serves as a major source of foreign exchange for the country.

One of the main functions of Ghana Cocoa Board (Cocobod) is to purchase, market and export cocoa and cocoa products produced in Ghana. In recent years, prices of cocoa on the international market have been fluctuating.