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Ghana Cocoa Board (COCOBOD) has signed a US$1.13billion pre-export receivables backed trade finance facility with a consortium of international financial institutions to finance cocoa purchases for the 2022/2023 cocoa season.
The facility, which would attract an interest rate of 1.75%, will also be used to finance operational activities within the crop season.
COCOBOD launched the facility to the market on 23rd August 2022 at a launch amount of US$1 billion and elected to upsize the facility to US$1.13 billion as a result of oversubscription.
The signing ceremony for this year’s facility took place at the Cocoa House in Accra.
Hon Joseph Boahen Aidoo, the Chief Executive of COCOBOD, in a virtual welcome address at the signing said despite the challenges facing the cocoa sector, brought on by the global financial difficulties, the sector had once again shown leadership.
He said going into the international financial market this year was a very daunting task due to the challenges that the country is facing.
“But we went into the international market this year with the best minds. We were able to launch an amount of 1 billion US dollars in August and today we have 1.13 billion US dollars committed for signing,” he stated.
He gave assurance that the funds will be used “effectively and efficiently” to support cocoa farmers and the industry.
“In spite of all the challenges, we also want to assure the sector minister, the minister of finance and the entire country that we will make sure that we improve upon our performance. Already the outlook is good for this crop season…. We will work hard and make sure that we make the whole country proud,” he said.
Mr Peter Mac Manu, the Chairman of the Board of Directors of Ghana Cocoa Board (COCOBOD), who also chaired the signing event said he was delighted about the attainment of the facility.
“…from where Ghana is sitting right now, people thought it will be very difficult for us to get the signing ceremony executed. But cocoa is cocoa, and we call it the ‘golden pod’, so it must always shine,” he said.
“We have done this syndication for the past 30 years. I'm happy that it continues to have the confidence of the financiers because we have never defaulted, and we will not default,” he assured.
Mr Ken Ofori-Atta, the Minister of Finance, who witnessed the signing event expressed gratitude to the board and management of COCOBOD and the financial partners, particularly, the Standard Charted bank for “shepherding” the facility to its success.
He said the signing gives reason for optimism in the Ghanaian economy.
“So, I believe it is time for us to have the kind of optimism that will raise Ghana and a black star up where it should be. Yes there continues to be a great future for our country and I think this will ring around the globe and give impetus to our negotiations [with the International Monetary Fund],” he said.
Similarly, Dr Ernest Addison, the Governor of the Bank of Ghana, expressed confidence that the finance facility will help stabilise the economy.
“Every Ghanaian has suffered from the impact of the depreciation of the currency, which has raised the cost of living and we are looking forward to being able to minimise the impact of the depreciation of the currency on the standard of living of Ghanaians, and this particular inflow helps very much in achieving that objective,” he said.
The Standard Chartered Bank, Coöperatieve Rabobank, Industrial and Commercial Bank of China (ICBC), MUFG Bank Ltd, Natixis and Ghana International Bank plc were the Initial Mandated Lead Arrangers for the facility.
Bank of China Limited, London branch joined the facility as Senior Mandated Lead Arranger, while DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main and the Arab Bank for Economic Development in Africa (“BADEA”) joined as Mandated Lead Arrangers. Ecobank joined as Arranger. The OPEC Fund, United Bank for Africa PLC, Ahli United Bank B.S.C. and Federated Hermes Inc joined as Lead Managers. AfrAsia Bank Limited, Citibank N.A, Absa Bank Ghana Limited and GCB Bank Plc joined as Managers.
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