COCOBOD has discounted claims of being a loss-making institution following a move to secure a $300 million loan facility to service some cocoa bills owed the Bank of Ghana.
Ghana Cocoa Board, which manages sales and purchases of cocoa beans, requires GHc1.1 billion ($223 million) to meet financial commitments for the annual crop season through September.
Amidst media claims of being a “loss-making” institution, COCOBOD insists it is viable and continues to fulfil its financial obligations.
“It will be unfair to term COCOBOD as “loss-making institution”. We are taking the loan to pay for loans we took from the Bank of Ghana to finance our operations. Interests we have paid on these loans have been overburdening our institutions so we are of the view that we could secure funding that would come with a less burdensome interest rate hence our decision to go for the loan,” Manager at the office of COCOBOD’s Chief Executive Officer, Fiifi Boafo, told JoyBusiness.
Having recorded a shortfall of Ghc2 billion in the previous harvest, proceeds of this loan facility is expected to refinance the 1.4 billion cedis in cocoa-bills owed the Central Bank of Ghana.
To this end, COCOBOD is in talks with a syndicate of lenders including Cooperative Rabobank UA and Societe Generale SA to borrow the money at 295 basis points over Libor, it said. This year the board has sold almost 2 billion cedis of the securities.
According to Fiifi Boafo, the loan will be financed over a spectrum of three years after a one-year moratorium. The board will set aside 50,000 tons of beans per year at a projected price of $2,200 per ton to service the agreement.
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