Ghana's Cocoa Marketing Board (COCOBOD) has successfully secured an $800 million syndicated loan with banks, marking a significant milestone in the country's cocoa industry. According to the deputy chief executive officer, the first drawdown of $600 million is expected to take place imminently, with the remaining $200 million anticipated to follow by the middle to end of January.
Traditionally, Ghana, the world's second-largest cocoa producer, relies on annual syndicated loans to facilitate the purchase of cocoa beans from local farmers. However, this year's loan encountered unprecedented challenges amidst the country's severe economic crisis and ongoing efforts to restructure bilateral and commercial debts.
Ray Ankrah, Deputy CEO of COCOBOD, emphasized the complexities involved in finalizing this year's transaction, describing it as the most challenging during his tenure. Despite the obstacles, the loan terms remain consistent with those initially presented to parliament last month, signifying a significant step forward for the industry.
The terms of the loan dictate that COCOBOD will incur an interest rate of nearly 8%, comprising the one-month Secured Overnight Financing Rate (SOFR) currently standing at approximately 5.3%, along with a 2.65% margin. This agreement received parliamentary approval in November, granting COCOBOD the necessary authorization to proceed with participating banks.
The impending drawdown of $600 million is poised to bolster the country's reserves, as noted by an unnamed central bank official. Additionally, economists anticipate that the loan could alleviate pressure on the local currency by mitigating the demand for dollars, which has been exacerbated by the slow progress in restructuring Ghana's bilateral debt.
Furthermore, the loan comes at a critical time for Ghana and its neighbor Ivory Coast, as both countries anticipate reduced cocoa yields due to adverse weather conditions. While COCOBOD has officially forecasted a production of approximately 800,000 tons for the 2023/24 season, industry sources suggest a more conservative estimate of around 600,000 tons for Ghana's harvest.
Despite the challenges, the $800 million syndicated loan represents a vital financial injection for Ghana's cocoa industry. Ankrah previously expressed intentions for COCOBOD to leverage record-high global cocoa prices by strategically selling a portion of the country's crop on the spot market.
The successful acquisition of the syndicated loan underscores Ghana's commitment to sustaining its position as a key player in the global cocoa market. As the industry navigates through unprecedented challenges, this financial arrangement is poised to provide essential support for cocoa production and uphold the country's vital agricultural sector.
(This article is sourced from citinewsroom.com and curated by Monica Kritel |Mydailyreports24)
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