Cocobod seeks to purchase 950,000 tonnes of cocoa beans …following approval of a US$1.3bn syndicated loan

Parliament has approved a US$1.3billion offshore syndicated loan for the purchase of 950,000 tonnes of cocoa beans for the 2019/2020 crop season.

This was contained in a memorandum to Parliament submitted by the Finance Minister, Ken Ofori-Atta, on the Receivables-Backed Trade Finance Facility Agreement between Ghana Cocoa Board and eight financial institutions.

The trade facility is to enable COCOBOD raise adequate funds to purchase cocoa beans from farmers, through licenced buying companies, for the 2019/2020 cocoa season.

The eight financial institutions are Cooperative Rabobank U.A; Ghana International Bank plc; MUGF Bank Ltd.; NATIXIS, Nedbank and Societe Generale (as lenders and Co-coordinating Initial Mandated Lead Arrangers and Bookrunners); Ghana International Bank (as Initial Mandated lead Arranger Collection Agent); and MUF Bank Ltd. (Facility Agent), for an amount of up to US$1.5billion to finance the purchase of cocoa for the 2019/2020 crop season by the Ghana Cocoa Board. And there is a Stamp Duty waiver of 0.5 percent of the Facility, amounting to US$76.5m, the report noted.

The offshore syndicated Trade facility is a loan usually sourced by COCOBOD for the purchase of cocoa and payment of margins to other stakeholders. For the 2019/2020 cocoa purchases, the loan will be used to purchase about 950,000 tonnes of cocoa beans.

See Also:  Wapic Insurance champions capacity building in the insurance industry

COCOBOD has also projected the cedi/dollar exchange rate for the draw-down period at GH₵5.20 to US$1.00.

The cocoa industry continues to play a crucial role in the country’s economic development. The industry contributes significantly to gross domestic product (GDP) and employs over 2 million people along the supply chain – remaining a major source of Ghana’s foreign exchange earnings.

The cocoa sector supports infrastructure development in education, roads and highways among others. Most of the foreign exchange earnings from cocoa are retained in the country, thereby boosting the country’s foreign exchange reserves.

Sourcing the facility also provides the nation with an opportunity to demonstrate its good track record on borrowing from the international financial markets.

Leave a Reply

Please Login to comment
Notify of