Joseph Boahen Aidoo, Chief Executive Officer of Ghana Cocoa Board (COCOBOD), says management has resolved to reduce the huge debt burden. The huge chunk of debt accumulation – approximately GH¢12.30billion as of September 2020 – emanates from short-term cocoa loans of about GH¢8.49billion, accounting for 69.02 percent of total debts.
At the Public Lecture & Media Launch for the 2022 National Cocoa Day celebration at the University of Professional Studies, Mr. Aidoo said the significant impact COVID-19 had on the cocoa trade led to a substantial fall in cocoa demand… which eventually had the effect of lowering revenues.
“Unfortunately, the ramifications of COVID-19 continue to cause more economic meltdown; thereby leading to plummeting demand for our cocoa. This has adversely affected the global cocoa trade, as projected revenue dropped abysmally and led to great financial shocks on Ghana’s cocoa regulator,” the CEO said.
Mr. Aidoo assured that management has decided to significantly cut debt levels in light of the fact that precipitating causes were wholly beyond COCOBOD’s control.
“In view of the fact that the precipitating factors were absolutely beyond our control, the Board and Management have resolved to reduce debt levels drastically. Consequently, in the short- to medium-term, stringent internal reforms have been advanced to control expenditures and cut costs while efforts are underway to finance existing debts,” he said.
One of the tactics being implemented by COCOBOD is to issue a bond with a maximum value of US$3billion to refinance the comparatively pricey cocoa bills. The pricey short-term cocoa payments are anticipated to be refinanced by using relatively affordable long-term debt.
To prevent debt from building up, COCOBOD is instituting tighter financial controls by making savings to pay-off all of the debts shown on its books.
Other debts accumulated include the 10-year BoG loan that has a balance of approximately GH¢1.39billion and is being serviced in accordance with the repayment schedule established with the Bank of Ghana. The moratorium on principal repayment terminated in January 2022, although COCOBOD anticipates paying off the debt in full by November 2023.
Cocoa Farmers Welfare
The Chief Executive noted that the Cote d’Ivoire-Ghana Cocoa Initiative’s much-lauded ‘Living Income Differential’ farmer-income development programme remains the most effective way to control cocoa prices and protect farmers from price volatility.
Accordingly, in the 2020/21 crop year COCOBOD increased the producer price per tonne of cocoa by 29 percent to as high as GH¢10,560.
“Making the cocoa industry more vibrant requires that our farmers are properly remunerated. It is in this regard that in the 2020/21 crop year government through COCOBOD increased the producer price per tonne of cocoa from GH¢8,240 to as high as GH¢10,560 – representing a 29 percent increase amid the ravages imposed by the COVID-19 pandemic on businesses globally,” the CEO said.
“In addition, there is a build-up in our concept of boosting domestic value addition and consumption of cocoa in an effort to reduce gluts of our produce on the world market to secure good prices,” he added.
Cocoa Day Celebration
The Board’s 75th Anniversary celebration, which will be held on the theme COCOBOD @ 75: Sustaining Our Environment, Wealth and Health with a series of activities from September 28 to October 1 in 2022 at the Suhum Presbyterian Senior High School Park, Suhum in the Eastern Region, has been timed to coincide with this year’s Cocoa Day celebration.
The annual Cocoa Day celebration is held to honour the contributions of our dedicated cocoa farmers, raise public knowledge of the nutritional and health benefits of cocoa, and inspire people to incorporate cocoa consumption into their daily life.
In addition to other measures, the yearly celebration that was started in 2005 aims to gradually increase Ghana’s per capita cocoa consumption – even if we still have a long way to go before we catch up with consumers in Europe, America and other affluent nations.