JICA and other DFIs provide US$600m syndicated loan to COCOBOD

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In a ceremony that complied with COVID-19 official meeting and social distancing guidelines, COCOBOD, Japan International Cooperation Agency, JICA, and other Development Finance Institutions have announced a US$600million credit facility for COCOBOD’s Productivity Enhancement Programmes (PEPs).

In November 2019, Development Finance Institutions (DFIs) including the African Development Bank (AfDB), Japan International Cooperation Agency (JICA), Development Bank of Southern Africa (DBSA) and Cassa Depositi e Prestiti Spa (CDP), and commercial finance agencies such as Credit Suisse AG (London Branch), the Industrial and Commercial Bank of China (London branch) and other International agencies signed a US$600million syndicated receivables-backed loan facility with Ghana Cocoa Board (COCOBOD) to boost cocoa productivity in Ghana.

The Chief Executive Officer of COCOBOD, Mr. Joseph Boahen Aidoo said: “As the second-largest cocoa bean producing country in the world, Ghana fulfils a major part of supplying to meet demand around the world.

“However, there are challenges with productivity of the country’s cocoa production, as well as with the systems in place for processing and the distribution of cocoa. By strengthening the cocoa bean-centric agricultural value chain and related industries, the finance will help COCOBOD contribute to achieving SDG Goals 1 (no poverty), 8 (decent work and economic growth) and 12 (responsible consumption and production).”

He continued: “COCOBOD will use the facility to raise cocoa yields per hectare and increase Ghana’s overall production. These include financial interventions to sustainably increase cocoa plant fertility, improve irrigation systems, and rehabilitate aged and disease-infected farms. The funds will also help increase warehouse capacity and provide support to local cocoa-processing companies”.

According to the Chief Representative of JICA Ghana, Yasumichi ARAKI: “At the 7th Tokyo International Conference on African Development (TICAD7) in 2019, JICA and AfDB agreed to provide US$3.5billion in joint financing under the fourth phase of the Enhanced Private Sector Assistance for Africa Initiative (EPSA4). This loan marks the first time JICA and AfDB will be providing direct co-financing under EPSA4, as well as being the first non-sovereign project.”

JICA has cooperated with the government of Ghana in various sectors since 1962. A firm relationship has been built over more than a half-century.

To mention a few examples, Noguchi Memorial Research Institute is one of the projects well-known by the people of Ghana, and also the Tema motorway interchange project that was recently completed and has already contributed to solving traffic congestion and accelerating economic activities in Ghana as well as neighboring countries.

In addition to those conventional projects, private sector support is currently one of JICA’s priority areas for this country, in line with the ‘Ghana beyond Aid’ agenda.

Cooperation with COCOBOD began in 2014, in which support was given to the capacity building of its quality control laboratory staff in advanced techniques for testing pesticide residue in cocoa beans. Cocoa is one of the most essential import commodities of Japan, and Ghana’s cocoa accounts for about 80% of all cocoa beans imported.

It is JICA’s hope that this loan facility will assist COCOBOD to implement the Productivity Enhancement Programmes (PEPs) more efficiently and sustainably to meet its expected goals. Also, that there will be increased yield of cocoa as cocoa farmers benefit from this nationwide programme. More importantly, apart from JICA’s US$100million contribution to this syndicated loan, it is also considering another technical cooperation to COCOBOD to support success for PEP implementation.

Ghana’s cocoa sector employs over 800,000 rural families and produces crops worth about US$2billion in foreign exchange annually. COCOBOD is a fully state-owned company solely responsible for Ghana’s cocoa industry, controlling the purchase, marketing and export of all cocoa beans produced in the country.

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