‘International banks didn’t reject us’— COCOBOD on self-finance plan

On August 23, 2024, 5:05 AM

Ghana Cocoa Board (COCOBOD) has strongly refuted claims that international banks refused its $1.5 billion loan request for the 2024/2025 cocoa season.

The denial follows Minority Leader Cassiel Ato Forson’s accusations that the loan failed due to COCOBOD’s poor financial health and the sector’s decline under current management.

In a robust statement released on Thursday, August 22, COCOBOD declared that the claims were “false”, revealing that syndicated banks had indeed submitted term sheets in response to their Request for Proposals (RFP).

COCOBOD emphasized that ongoing discussions with financial institutions demonstrate continued confidence in its creditworthiness.

“The assertion by the Minority Caucus that the International Banks have rejected the Ghana Cocoa Board’s request and that COCOBOD was ‘chased away’ from the market is false. This is so because syndicated banks submitted term sheets in response to COCOBOD’s earlier Request for Proposals (RFP) for consideration.

“Indeed, notwithstanding our intentions to wean off syndicated transactions, we still have committed contracts that need to be fulfilled through the syndicated process. These transactions have necessitated a discussion with financial institutions, and nothing in this process indicates, to us, a lack of confidence in COCOBOD’s creditworthiness from these financial institutions.”

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COCOBOD further condemned the Minority for spreading “falsehoods, inaccuracies, and misrepresentations” about the cocoa sector and the Board’s shift away from syndicated external borrowing.

The Board firmly denied the Minority’s claim that its move to source funding domestically is merely a “face-saving” tactic to cover up financial troubles, calling this assertion “categorically untrue.”

Background

Ghana Cocoa Board (COCOBOD) announced it will not seek cocoa-syndicated loans for the 2024/25 season set to begin on September 1.

COCOBOD Chief Executive Joseph Boahen Aidoo revealed that the Board will now finance cocoa purchases domestically.

“We’ve learned from the past two years and decided it’s time to rely on local funding instead of offshore markets,” Mr Aidoo said.

He assured that COCOBOD has a clear plan for how much money is needed and where it will come from. The Board has also revised its target for the season from 810,000 tonnes to 650,000 tonnes.

Originally, COCOBOD intended to raise $1.5 billion from international markets, but Aidoo noted that this plan is no longer viable due to nearly $150 million in interest payments from last year.