The management of Ghana Cocoa Board(COCOBOD) says it has put in place measures to pay all debts it owed.
Among the measures, COCOBOD has maintained that it will use tight budgetary controls to help refinance its debt.
The assurance comes as the 2021 Auditor General’s Report revealed that COCOBOD is in debt to the tune of ¢12.3 billion.
According to the 2021 Auditor General’s report, COCOBOD is said to owe short-term loans of about ¢8.49 billion, a 10-year Bank of Ghana loan of almost ¢1.4 billion and a medium-term loan in a total of ¢1.28billion.
COCOBOD also owes the African Development Bank GH¢1.14 billion.
But in its response, COCOBOD assured that it has taken some steps to settle the debt.
This includes the issuing of a bond of up to $3 billion to refinance its expensive cocoa bills.
COCOBOD also stated that the long-term debt, which is relatively cheaper, is expected to be used for refinancing the short-term cocoa bills.
“In the case of the 10-year BoG loan, COCOBOD noted a balance of about ¢1.39billion which is being serviced based on a repayment schedule agreed with the Bank of Ghana. The moratorium on repayment of the principal amount expired in January 2022; however, it expects to fully extinguish the loan by November 2023”, COCOBOD said.
Response from COCOBOD to Auditor General
However, the management of COCOBOD indicated in a response that the institution is implementing tighter budgetary controls, to ensure that debt is not accumulated but rather make savings to repay all debts in its books.
Some of the strategies include issuing a bond of up to US$ 3 billion to refinance the relatively expensive cocoa bills. The long-term debt, which is relatively cheaper, is expected to be used for refinancing the short-term cocoa bills that are expensive.
In the case of the 10-year BoG loan, COCOBOD noted a balance of about GH¢1.39billion which is being serviced based on a repayment schedule agreed with the Bank of Ghana. The moratorium on repayment of the principal amount expired in January 2022; however, it expects to fully extinguish the loan by November 2023.
The total balance of non-current and current liabilities on the medium-term loan (MTL) of GH¢1.2 billion has been settled, according to COCOBOD.
“As a result of the prudent financial management being implemented, the MTL has been fully repaid 1 year ahead of schedule,” the Board said.
On the BADEA loan, COCOBOD notes a possible write-off for the debt, following an agreement with the Ministry of Finance and subject to Parliamentary approval.
2020 financial year performance
In the 2020 financial year, COCOBOD recorded a loss of ¢426million as compared with a loss of ¢320million registered in 2019.
This represents a 33% decrease in the Board’s financial performance over the period.
Revenue increased by 5.2%, from ¢9.76 billion in 2019 to ¢10.27 billion in 2020.
Even though COCOBOD recorded a 4.41% fall in cocoa production over the previous year, the rise in revenue was largely attributed to a higher export price per tonne of $2,477 in 2020 compared with an average export price of $2,236 for 2019.
The Board’s liquidity ratio (Current ratio) improved from 0.75:1 in 2019 to 0.82:1 in 2020. The increase notwithstanding, the Board will not be able to meet its short-term obligations as and when they fall due.
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