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Ghana’s Cocoa Marketing Board (COCOBOD) has successfully concluded an $800 million syndicated loan with banks, and the first tranche of $600 million is expected to be drawn down this week, according to the deputy chief executive officer. The loan, an annual tradition to finance cocoa bean purchases from farmers, faced delays this year due to Ghana’s economic challenges and debt restructuring efforts.
COCOBOD Deputy CEO Ray Ankrah remarked on the difficulty of this year’s transaction, citing it as the most challenging since 2018. The loan terms remain unchanged from those presented to parliament last month, with the first $600 million set to be drawn down by the end of the week and the remaining $200 million in mid to late January.
Parliament’s approval in November paved the way for COCOBOD to finalize the deal with participating banks. The loan terms include an interest rate of nearly 8%, encompassing the one-month Secured Overnight Financing Rate (SOFR) at around 5.3% and a margin of 2.65%.
A drawdown this week is anticipated to bolster Ghana’s reserves, according to an unnamed central bank official. Economist Professor Agyapomaa Gyeke-Dako suggested that the loan could mitigate dollar demand pressures on the local cedi currency, influenced by the slow progress in restructuring the country’s bilateral debt.
Ghana and Ivory Coast are anticipating reduced cocoa crops due to adverse weather conditions. COCOBOD officially projects a production of about 800,000 tons for the 2023/24 season, while industry sources estimate a harvest closer to 600,000 tons. Despite challenges, COCOBOD aims to capitalize on record-high global cocoa prices by selling a portion of the crop on the spot market.
Source: Omanghana.com
