International banks rejected COCOBOD’s loan request to purchase cocoa for 2024-25 crop season – Minority

According to the minority, this development is a significant indicator of the declining confidence that global financial institutions have in COCOBOD under its current management.

The minority argued that the refusal of the loan request highlights the mismanagement and poor financial decisions that have plagued COCOBOD in recent years.

They noted that COCOBOD has traditionally relied on offshore syndicated loans to finance the purchase of cocoa beans, but the rejection by international banks this time around points to a loss of trust in the organisation’s ability to manage its finances effectively.

The Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo, recently announced that, for the first time in three decades, the organisation will not secure offshore syndicated loans to finance the purchase of cocoa beans for the 2024–2025 crop season.

Targeting the purchase of around 650,000 metric tonnes of cocoa beans, COCOBOD stated that it plans to finance the procurement entirely from its internal operations.

However, the NDC MPs, in their statement, emphasized that this situation could have serious repercussions for the cocoa sector, which is a crucial part of Ghana’s economy.

They warned that without the necessary funding, COCOBOD might struggle to meet its cocoa purchasing targets for the upcoming season, potentially leading to a negative impact on cocoa farmers and the broader economy.

The minority called on the government to address the underlying issues that have led to this loss of confidence in COCOBOD.

They urged for a review of the current management practices and for measures to be put in place to restore the organisation’s credibility with international financial institutions, ensuring that the cocoa sector remains strong and stable.

“For the first time in 32 years, international banks have rejected the 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 for a $1.5 billion loan to purchase up to 650,000 metric tonnes of cocoa for the 2024–2025 crop year. But this request did not attract any interest from the international banks due to the poor health of COCOBOD and the collapse of the cocoa sector under its present management.”

“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,” an excerpt of the statement said.