COCOBOD Assures Farmers of Cocoa Loan Syndication Despite COVID-19 Pandemic
Chief Executive Officer (CEO) of COCOBOD, Joseph Boahen Aidoo
The Ghana Cocoa Board (COCOBOD) has assured farmers and other stakeholders that, the current processes underway to secure funds from international financial institutions to finance cocoa production and purchases in the 2020/21 cocoa season would not be abandoned despite the fierce outbreak of the coronavirus disease.
The Chief Executive Officer (CEO) of COCOBOD, Joseph Boahen Aidoo, in an interview said although the pandemic had impacted the board’s operations, it would carry on to borrow funds to finance next season’s cocoa production.
According to him, the basis of the syndication which is the production of cocoa is on-going albeit the partial lockdown of major cities in the country to help contain the spread of the virus.
“There is no need to panic because the syndication will surely happen. Yes, we admit that there is a challenge, COVID-19 has slowed the process but we are on course and we are sure that by the time the season opens, the funds would have been ready,” he said.
The funds from the annual syndication exercise are usually used by the board to purchase cocoa, exports it and uses the earnings to repay the loan.
The CEO said the Cocoa Marketing Company (CMC) has witnessed difficulties selling the country’s cocoa, as most buyers and trade houses have closed their office due to the pandemic.
However, Mr. Boahen Aidoo was optimistic that the board would come up with ways to make sales for the necessary guarantees to be secured against the season’s cocoa loan.
Although the exact amount to be borrowed for this year is unknown, the CEO said “indications were that this year’s loan would be more than what was syndicated last year.”
The 2020/21 cocoa season will begin in October next year.
Loan repayment for last year
The CEO said the repayment of the $1.3 billion loan was in progress and would have ended by now had it not been for the COVID-19.
The loan was borrowed last year from a syndicate of international financial institutions to finance the production and purchases of cocoa for the 2019/2020 season.
How has COCOBOD addressed some of its COVID-19 challenges?
Just like COCOBOD, many companies have also been confronted with several challenges as a result of the outbreak of the COVID-19 pandemic.
Mr. Aidoo explained that the board has been using video and telephone conferencing and the exchange of relevant documents through courier services as some of the strategies to hold formal meetings with its lenders and advisors on the loan syndication exercise.
He mentioned that it was using alternative methods to raise funds to make purchase for cocoa from farmers.
He added that the board is in the process of selecting financial institutions that will act as lead arrangers for the syndication of the funds from other lenders.