Foreign Banks have rejected COCOBOD’s request for loan to finance the purchase of cocoa – Minority

The Minority in Parliament has expressed concerns about the financial stability of COCOBOD, stating that the organization has had loan requests for cocoa purchases for the 2024–2025 harvest season turned down by foreign banks.

The Minority claims that this development is a key symptom of the waning trust that international financial institutions have in COCOBOD under its current leadership.

The Minority said that COCOBOD’s recent financial mismanagement and bad choices are highlighted by the loan request’s denial.

They pointed out that although COCOBOD has historically relied on offshore syndicated loans to finance the acquisition of cocoa beans, the rejection this time around by foreign banks suggests a decline in confidence in the organization’s capacity to efficiently manage its finances.

Joseph Boahen Aidoo, the CEO of COCOBOD, has said that the company would not obtain offshore syndicated loans to fund the purchase of cocoa beans for the 2024–2025 harvest season, marking the first time in thirty years that this has happened.

With a target purchase amount of around 650,000 metric tons of cocoa beans, COCOBOD said that it will fund the acquisition fully from internal activities.

But in their minority statement, the NDC MPs emphasized that this might have major consequences for Ghana’s cocoa industry, which is a vital component of the country’s economy.

They cautioned that in the absence of the required funds, COCOBOD would find it difficult to reach its objectives for buying cocoa for the forthcoming season, which might have a detrimental effect on cocoa growers and the whole economy.

The minority demanded that the government deal with the fundamental problems that have caused this decline in trust in COCOBOD.

In order to guarantee that the cocoa industry stays robust and stable, they called for an evaluation of the organization’s present management procedures and the implementation of steps to rebuild the organization’s reputation with global financial institutions.

“For the first time in 32 years, International Banks have rejected Ghana Cocoa Board’s (COCOBOD) request for a prepayment loan to finance the purchase of cocoa.”

“In June 2024, COCOBOD issued a Request for Proposal of $1.5 billion loan to purchase up to 650,000 metric tonnes of cocoa for the 2024/2025 crop year.

However, because of COCOBOD’s poor health and the collapse of the cocoa business under its current administration, this proposal did not pique the attention of any international banks.”

An excerpt of the statement said “From a production level of 969,000 metric tonnes inherited from the NDC in the 2016/2017 crop year, cocoa production has declined to just a little over 400,000 metric tonnes for the 2023/2024 cocoa season.

The significant decline in cocoa production in the last eight years and the mismanagement of the cocoa sector have impacted COCOBOD’s ability to meet its contractual obligations.”

Source: Ghanatodayonline.com