COCOBOD to take out a US$1.3b loan for Ghana’s cocoa purchases

GHANA – Ghana’s Cocoa Board (COCOBOD) will sign a US$1.3 billion pre-export syndicated loan agreement with international banks and local establishments with the Government of Ghana as the guarantor to finance the acquisition of cocoa beans for the season which will begin in October.

The first tranche of the US$1.3 billion COCOBOD Cocoa Syndicated Loan is expected to hit the Bank of Ghana’s (BoG) account by October 2022.

The second tranche of $390 million, which would be spread over three months should be coming in from November 2022 to February 2023.

Parliament approved the loan in July, despite efforts to overcome an economic crisis and a nearly US$2.5 billion balance-of-payments deficit.

Local currency observers believe the loan will inject much-needed foreign exchange liquidity into the economy and reduce surging dollar demand, while strengthening consumer demand and reducing inflation expectations.

Cocoa production in Ghana is down sharply this year, seen at 689,000 tonnes on 1 September after a previous forecast of 800,000 tonnes

Ghana’s Cedi currency has been one of Africa’s worst performing currencies this year, having lost around 30% of its value against the dollar in that period.

In Ghana as in Côte d’Ivoire, the 2022/2023 cocoa year will open in a global context of inflation and appreciation of fertilizer prices against a background of rising energy prices linked to the invasion of Russia and Ukraine.

This poor economic situation could limit cocoa production and also lead to a slowdown in chocolate consumption, particularly in Europe.

Cocoa production in Ghana is down sharply this year, seen at 689,000 tonnes on 1 September after a previous forecast of 800,000 tonnes. This has prompted the International Cocoa Organisation (ICCO) to upwardly revise its forecast for a global cocoa deficit.

The lower yields partially result from farmers using less fertiliser, with prices having increased worldwide due to high energy prices and supply disruption caused by Russia’s invasion of Ukraine.

In Ghana, the world’s second largest cocoa producer behind Ivory Coast, broad bean cultivation is the prerogative of nearly 800,000 people. The two West African countries account for around 60% of global cocoa supply.

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