Parliament has approved a loan facility to the tune of one Billion US Dollars for the purchase of an estimated 900,000 metric tonnes of cocoa beans for the 2020/2021 crop season by the Ghana Cocoa Board.
The Trade Finance Facility between The Ghana Cocoa Board and consortium of Banks and Financial Institutions with Ghana as a guarantor, is to enable COCOBOD to raise funds to purchase cocoa beans from farmers through Licensed Buying Companies and to finance other operations of the Board for the 2020/2021 cocoa season.
COCOBOD however, required by the Stamp Duty Act, 2005 (Act 689) to pay a zero-point-five percent (0.5%) of the Facility Amount as Stamp Duty and accordingly, Parliament has waved the Stamp Duty amounting to the Ghana Cedi Equivalent of Six Million, Five Hundred United States Dollars (US$6,500,000.00).
The terms of the financing are as follows:
i. Facility Amount US$1,300,000,000.00
ii. Interest rate One Month LIBOR + 1.75% p.a.
iii. Commitment Fee 0.62% p.a.
iv. Upfront Fees 1.25% flat.
The cocoa industry has been the backbone of Ghana’s economic development over the years.
The industry has over the years provided employment for millions of Ghanaians and serves as a major source of foreign exchange earner for the country.
Cocoa production in Ghana has also increased significantly since the 1999/2000 crop season reaching an aII-time high of over a one million metric tonnes in the 2010/2011 crop season.
The increase in the levels of production requires substantial financial resources to enable the Ghana Cocoa Board (COCOBOD) to finance the purchase of cocoa beans.
To this end, the Syndicated Trade Finance arrangement was put in place in 1993 to enable the Ghana Cocoa Board secure a loan facility to finance cocoa purchases and for other payments each year.
To enable the COCOBOD purchase cocoa for the 2020/2021 crop season, the Board of Directors of the Ghana Cocoa Board and the President have given approval for the COCOBOD to borrow an amount of One Billion and Three Hundred Million United States Dollars (US$1,300,000,000.00) to finance cocoa purchases in the 2020/2021 cocoa season.
Story filed by Edzorna Francis Mensah
