COCOBOD Ends 32 Years syndicated loan for Cocoa Purchases?
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In a surprising move, the Ghana Cocoa Board (COCOBOD) has announced the end of its 32-year practice of borrowing from international markets for cocoa purchases on a yearly basis.

This decision comes amidst skepticism, with some critics suggesting that COCOBOD’s shift is a strategic move to salvage its public image rather than a substantive change in its financial strategy.

COCOBOD’s long-standing unsustainable debt levels have severely impacted its creditworthiness, making it challenging to access financial markets.

The anticipated lower cocoa yield for the current season, which requires less liquidity for purchase, has prompted COCOBOD to forego syndicated loans, which are deemed economically unfeasible under the current conditions.

The Board’s financial stability remains a concern. Questions have arisen about how COCOBOD plans to secure the necessary liquidity for the season without resorting to traditional financial markets.

In response, COCOBOD has outlined its strategy to seek domestic funding as part of a broader plan to diversify its financial resources and improve its sustainability and effectiveness in supporting farmers.

The Board has strongly denies claims from Ghana’s Parliamentary Minority caucus that its decision is a result of ongoing financial losses and deteriorated creditworthiness.

Despite reports of a GHȼ4.2 billion loss in 2023, COCOBOD maintains that it recorded a profit of GHȼ2.3 billion for the 2022/2023 crop season, as per audited accounts by Ernst & Young (EY).

Although critics say this achievement was as a result of haircut suffered by cocoa bond holders as result of the financial re-structuring, COCOBOD attributes this profit to successful cost-cutting measures, improved operational efficiency, and strategic investments.

On a positive note, COCOBOD indicated that Ghana achieved its highest-ever cocoa production of 1.045 million metric tonnes during the 2020/2021 crop season, underscoring the sector’s potential despite financial challenges.

The Board’s pivot to exploring non-syndicated funding options is intended to enhance its financial independence and better support the cocoa farming community in the long term.