CEO of COCOBOD, Joseph Boahen Aidoo has downplayed a report from the Reuters News Agency that international risk underwriters pulled back from the 2020/2021 cocoa syndication loan citing Covid-19 risks.
Speaking during the launch of an AfDB 600 million-dollar syndicated loan facility, Joseph Boahen Aidoo reiterated that COCOBOD was in good standing with its international lenders who are all prepared to sign up for the loan facility in September this year. Here is his full delivery:
“I want to touch briefly on a matter which I’m sure is on the minds of a number of us here because it has been in the media recently. I’m talking about the report that COCOBOD is unable to raise its planned $1.3 billion through a syndicate of banks, due to perceived risks associated with the COVID-19 pandemic. These publications are simply not accurate. They do not reflect the current state of engagements between COCOBOD and its financial partners.
“But first, it is important that I inform you that COCOBOD has paid its 2019/2020 loan facility in this present month of June 2020, three months ahead of schedule, even in this time of COVID-19.
“And so, with respect to the $1.3billion syndicated loan, COCOBOD issued Requests for Proposals (RFP) in February 2020 to International Banks to raise the funds for the 2020/21 cocoa purchases.
On June 12, 2020, the financial institutions including COCOBOD’s traditional Banks submitted their proposals. Evaluation of the proposals was held on 18th June 2020 by an in-house committee chaired by the Chief Executive with representatives from the Ministry of Food and Agriculture, the Ministry of Finance and the Bank of Ghana.
So, COCOBOD is currently negotiating the terms of the proposals with the Banks; which is the normal practice. Once the terms are finalized, all due processes will be followed through to their logical conclusion, up to the signing of the facility which is expected in September 2020.”
COCOBOD’S unveiling of $600 million AfDB syndication loan
Ghana’s cocoa regulator, COCOBOD, has signed a loan facility for productivity enhancement programs of the cocoa sector.
The ¢600m syndicated receivables backed loan, which was signed in November last year, follows two years of negotiations between COCOBOD and Development Finance Institutions including African Development Bank (AfDB), Japan International Cooperation Agency (JICA), Development Bank of Southern Africa, Credit Suisse AG among others.
The funds are expected to shore up local production of cocoa especially as demand soars amid the coronavirus.
“I must put on record that with our own resources, significant progress has been made in our collective resolve to implement various Productivity Enhancement Programmers (PEPs) to increase yield per hectare to at least 1000 kilograms.
“For instance, the 2020 Mass Pruning Exercise, which began two months ago has been excellent. I am happy to indicate that we have achieved 100% coverage of the farm area, giving more prospects for higher yields,” CEO of COCOBOD, Joseph Boahen Aidoo stated.
Already, COCOBOD has drawn ¢200 million from the AfDB to embark on various cocoa projects including pollination and pruning. The CEO of COCOBOD is expressing confidence in increasing cocoa yields to 1.1 million tons of cocoa by 2026/27 crop year.
Government’s cocoa growth initiatives
Meanwhile, Minister for Agriculture, Owusu Afriyie Akoto says the government is keen on expanding Ghana’s cocoa sector mainly through tailor-made initiatives for the cocoa community.
“In an effort to curtail these challenges, we instituted a number of Productivity Enhancement programs (PEPs) and other policy interventions. Among these are: Re-launching of the Cocoa Diseases and Pest Control Program (CODAPEC), enhancement of the national cocoa rehabilitation program with new incentives to landowners and farmhands, Introduction of a National Hand Pollination and mass pruning program, piloting of a cocoa farm irrigation program, launching of a national cocoa consumption campaign to make cocoa a household food in Ghana among others.
“Apart from the LID which will be fully implemented in October 2020, the benefits of all the other interventions are already being enjoyed by cocoa farmers across the country,” he said.
Meanwhile, board chairman of COCOBOD, Hackman Owusu Agyeman, has challenged COCOBOD to explore domestic ways of pre-financing cocoa projects in the coming years.
JICA and AfDB agreed to provide a $3.5 billion joint facility under the 4th phase of the Enhanced Private Sector Assistance for Africa Initiative. This loan marks the first time JICA and AfDB will be providing direct co-financing under EPSA4 as well as the first non-sovereign project.
This was made known during the 7th International Conference on African Development in 2019, with the International Conference on African Development.