COCOBOD raises $1.5 billion

The Ghana Cocoa Board (COCOBOD) Wednesday signed a $1.5 billion pre-export trade finance facility for the purchase of cocoa for the 2010/2011 season.

This year’s facility, the biggest ever raised for COCOBOD, which was over-subscribed by $300 million, was put together by a group of international and local banks led by the Credit Agricole and Investment Bank, which is headquartered in France.

The Chief Executive Officer of COCOBOD, Mr Anthony Fofie, signed for COCOBOD while Mr Lan Stern, the Director and deputy head of Africa Natural Resources of Credit Agricole and Investment Bank, signed for the consortium.

Speaking at the ceremony in Accra, Dr Kwabena Duffour, the Minister of Finance and Economic Planning, said the cocoa industry remained the major anchor of the Ghanaian economy in terms of tax revenue, foreign exchange earnings and employment generation.

He said the cocoa industry would continue to play its important role in the economy in spite of the coming on stream of oil and gas, adding that the government had put in place a number of measures to support the industry to increase its production from the current level of less than 700,000 metric tons to 1,000,000 metric tons by 2012.

The Finance Minister said to realise this objective the government increased the producer price of cocoa to 71.1 per cent of the net FOB value of cocoa exports during the 2009/2010 cocoa season and this translated into GH¢2,208 per tonne compared to the GH¢1 ,632 paid during the 2008/2009 season.

Dr Duffour said the government also directed that bonuses totalling GH¢50 million meant for the 2008/2009 main crop season be paid to the farmers and this was in addition to the seed money of GH¢15 million provided for the establishment of Cocoa Farmers Social Security Fund.

He said COCOBOD had come a long way since the first syndicated loan of $140 million in 1993.

Dr Duffuor said the ability of COCOBOD to service fully and timely syndicated loans had raised the confidence of the banks in the organisation to the extent that during the 2007/2008 cocoa season it was able to raise a $900 million facility for cocoa purchases, notwithstanding the international financial meltdown.

He stated that the signing was a reflection of the confidence investors had in the Ghanaian economy, which was emerging as one of the frontier economies with a potential to attract significant foreign investors.

The Finance Minister said during the first six months of this year, the country registered 213 projects of foreign origin with a total value of $850.4 million.

He asserted that even though real GDP growth slowed down to 4.1 per cent in 2009 on account of major challenges the new administration faced; the economy was expected to bounce back to, at least, a growth of 6.5 per cent of GDP this year due to improvement in the domestic economic environment, adding that real GDP growth was projected to reach about 20 per cent in 2011, when the oil and gas would have come on stream.

Dr Duffour said the external sector had similarly improved since 2008 with the trade deficit declining from 30 percent of GDP in the same year to 14.2 per cent of GDP in 2009, with the current account deficit dropping from 18.7 per cent of GDP in 2008 to 5.1 per cent of GDP in 2009.

For his part, Mr Fofie said the loan, which ranked among the highest in emerging economies, was not only successfully syndicated but also significantly over-subscribed to $1.8 billion and COCOBOD humbly took $1.5 billion.

He said the road leading to this successful day started some three months ago in London through to Beijing and finally to Accra at a time when the rubbles of the fallout of the global financial crisis were all over the place.

He expressed the belief that agriculture, especially cocoa production, could offer the best pathway out of poverty and for the transformation of the rural economy.

Mr Fofie assured the banks that COCOBOD would continue to work hard to maintain its enviable record on the international financial market and continue to broaden the horizon of collaboration among players.

He said the future of Ghana’s cocoa industry was bright and held many prospects for its partners in the international financial market.

Mr Fofie pledged the commitment of the company to ensure that the industry remained vibrant and attractive in the years ahead.

Source: Daily Graphic

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