Cocoa comes to the rescue of sinking cedi

In a bid to recapture its position as world largest producer of cocoa, Ghana’s cocoa industry regulator, COCOBOD, is about to sign a $2billion syndicated loan facility with international financial firms for the purchase of this year’s crop.
While the initiative is geared towards Ghana securing its previous number one spot in world cocoa production, the move is also targeted at shoring up the nation’s reserves and arresting the fast depreciation of the national currency, the cedi.
The $2billion syndicate loan is expected to hit COCOBOD’s account by the end of the third quarter of this year. Financial analysts say it will fill the big hole in the country’s almost depleted foreign reserves at the Bank of Ghana and help the Bank to ‘fight’ the cedi depreciation.
COCOBOD aims to raise the country’s annual average cocoa production from the present 800,000 tonnes, which makes Ghana trail behind neighbouring Cote d’Ivoire as the world’s leading producer of the crop, to 1 million tonnes.
The Chief Executive Officer of COCOBOD, Dr Stephen Opuni, and Board Chairman, Ambassador Daniel Ohene Agyekum, have confirmed the loan in separate interviews.
According to the two senior government officials, the decision to increase the yearly syndicated loan from last year’s figure of $1.2billion to about $2billion would position Ghana to reclaim its position as the leading producer of cocoa in the world.
The decision, the duo noted, is also geared towards achieving President John Dramani Mahama’s vision to make the cocoa sector attractive for investors and to sustain it beyond the present generation.
The COCOBOD syndicated loan, a yearly initiative by the industry regulator, is used to purchase cocoa beans from farmers ahead of each crop year. The loan is obtained through local and international financiers.
According to players in the cocoa industry, the high participation of international and local banks in the annual phenomenon is as a result of Ghana’s integrity and image of producing quality cocoa beans.
In its heyday, Ghana was the world’s leading producer of cocoa but lost that position to Cote d’Ivoire due to factors such as unimproved farming methods, smuggling and low incentives to farmers.
Source: El Hajj newspaper