Ghana turns to cocoa traders for $400 million amid delays in foreign bank loans

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Ghana turns to cocoa traders for $400 million amid delays in foreign bank loans
Ghana turns to cocoa traders for $400 million amid delays in foreign bank loans

Ghana is actively pursuing a $400 million loan from cocoa traders to support its industry operations during an ongoing government-debt restructuring process.

The country’s cocoa industry regulator, Cocoa board (Cocobod), is turning to traders for financial assistance, as it faces challenges in securing loans from international banks.

Cocobod is engaging with cocoa firms such as Olam Group Limited and Barry Callebaut AG to pre-finance various needs, including seedlings, chemicals, fertilizers, and bean purchases from farmers for the 2023-2024 season.

According to Fiifi Boafo, Cocobod’s Public Affairs Manager, the industry has already borrowed between $150 million and $200 million from cocoa traders due to delays in securing a bank loan.

Cocobod has plans to borrow a total of $1.2 billion for the current season, with $800 million coming from a syndicate of lenders and the remaining $400 million from alternative sources.

Boafo explained that the delays in the syndication process led them to approach traders to bridge the funding gap, with the understanding that the funds will be repaid using the season’s harvest.

Boafo also disclosed that the parliament would commence the approval process for the agreements on the $800 million syndicated loan in the coming week, after which Cocobod will proceed to collaborate with partner banks for the loan signing.

Ghana is expected to produce 850,000 tons of cocoa in the current season, marking an improvement from the 683,000 tons it produced in the previous season, which was a 13-year low.

In May 2023, the International Monetary Fund (IMF) approved a three-year extended credit facility (ECF) arrangement of $3 billion for Ghana.