Cocobod signs $1.3bn syndication loan with 24 foreign banks

Cocobod signs $1.3bn syndication loan with 24 foreign banks
Source: Ghana | Myjoyonline.com | Charles Ayitey |Joy Business
Date: 15-09-2019 Time: 10:09:31:am

The Ghana Cocoa Board (Cocobod) has signed the annual cocoa loan syndication deal in Paris, France with some 24 French banks.

The loan, totalling $1.3 billion is to aid for the purchase of cocoa in the 2019/2020 crop season.

Chief Executive of Cocobod, Joseph Boahen Aidoo, in a live telecast from France, has revealed the syndication loan will be financed in a 7-month interval from February to August 2020.

The signing of the annual cocoa loan syndication comes in the wake of the swollen shoot viral disease that has ravaged acres of cocoa farms in the West North of Ghana.

Mr Boahen Aidoo revealed this development left them no option than to reduce cocoa output from the expected 900,000 metric tons to 850,000 metric tons.

Meanwhile, Joseph Boahen has impressed on Cocobod’s international lenders to reduce the rate of lending next year.

This comes in the wake of the 1.3billion syndication loan go at an interest margin of 55 basis points by libor.

According to him, “reducing the lending rate will go a long way to help us borrow more for the betterment of our Cocoa Farmers”.

One of the immediate impacts the deal will have on the economy is that it will improve Bank of Ghana’s reverses, a situation that could give investors and currency traders some assurance about the central bank’s ability to defend the local currency. 

The payment to the farmers and licensed buying companies will also improve liquidity in the banking system. The inflows of these funds will also help stabilise the cedi in the last quarter of this year.