Ghana’s COCOBOD Plans $1.5 Billion Loan to Offset Cocoa Shortfall

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COCOBOD, Ghana’s cocoa regulator, is set to secure a loan of up to $1.5 billion by September to finance cocoa purchases for the 2024/25 season and compensate for a projected shortfall in output. Sources familiar with the arrangement revealed this information on Sunday.

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Traditionally, Ghana relies on an annual syndicated loan to fund cocoa bean purchases from farmers, typically agreed upon at the start of the season in September. However, delays have occurred this year due to lower-than-expected cocoa output.

To address this challenge, COCOBOD has already withdrawn $600 million from an initial $800 million loan and scrapped the remainder due to the significant shortfall in cocoa production, which is estimated to be nearly 40% below forecast.

According to one source, COCOBOD has issued a request for proposal to banks, indicating its intention to borrow up to $1.5 billion for the upcoming season. International banks have already begun inspecting cocoa farms in Ghana as part of the loan evaluation process.

Despite the setbacks, COCOBOD remains optimistic about securing the syndicated loan. Production is expected to rebound to 810,000 metric tons next season, with hopes pinned on improved weather conditions and the rehabilitation of cocoa farms to boost output.

However, challenges persist in Ghana’s cocoa sector, including adverse weather conditions, diseases like the swollen shoot virus, and rampant smuggling activities. These factors have contributed to a significant decline in cocoa export revenue, which fell nearly 50% year-on-year in the first four months of this year, according to central bank data.

Despite the hurdles, Ghana is determined to meet its cocoa production targets, banking on improved conditions and ongoing efforts to revitalize the cocoa industry.

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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