The Ghana Cocoa Board (COCOBOD) signed a loan agreement in September last year with 25 banks to borrow US$1.3billion. The facility was critical in COCOBOD’s pursuit to purchase a total of 850,000 tonnes of cocoa from farmers for the crop season.
Amid fears that the loan cannot be repaid, the Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo, is assuring lenders that the board is on course to meeting its financial obligations toward the US$1.3billion crop syndicated facility, despite a dwindling crop harvest due to dry weather and plant disease.
Mr. Aidoo indicated that COCOBOD started paying the first instalment in February and will continue over the next seven months. The hope now is that, with expected improved rains, the small growing season will see a better harvest.
The COCOBOD CEO dispelled rumours that his outfit might default in repayment of the loan, adding that over the past 25 years COCOBOD has been a credible borrower and has never defaulted. These are re-assuring words from the COCOBOD, as anxiety that followed the likelihood of a loan default was beginning to set in.
Mr. Aidoo has done the proper thing by coming out publicly to assure the world that there is no need to fear any loan repayment default by COCOBOD, and that repayment is on schedule since the first instalment was paid last month.
The assurance is timely, as rumours started making the rounds saying that COCOBOD is likely to default in the loan repayment – and they caused some level of anguish in business circles since cocoa is the mainstay of the Ghanaian economy, and any perceived loan default in the sector would raise eyebrows and create some panic.
Mr. Aidoo explained that the Board is in talks with government on ways to pay for operational expenses and liabilities, as the cost of debt on local markets is too expensive.
The country is likely to produce around 700,000 tonnes of cocoa this season – well short of its initial forecast of 850,000 tonnes due to poor rains during the main crop harvest. Over-reliance on rain-fed agriculture has been the bane of our agriculture, and we need to introduce irrigation widely as a substitute.