Ghana Cocoa Board (COCOBOD) says it secured US$1.8 billion syndicated loan from a consortium of banks to allow it purchase cocoa beans for the 2016/2017 crop season beginning next month will hit Bank of Ghana’s account within the next two weeks.

“The money will soon hit the account. Normally we will have to give them about a week or two weeks to finish processing all the documents and then transfer the money to Bank of Ghana’s account. Then we open the season,” said Noah Kwesi Amenyah, Public Affairs Manager of Cocobod at a media conference in Accra after the signing ceremony that took place in Frankfurt.

It is expected that the US$1.8 billion loan will help improve the Bank’s international reserves as well as help stabilize the cedi in the coming months.

The facility was signed by Dr. Stephen Kwabena Opuni, the Chief Executive Officer of the Cocobod and was witnessed by Mr. Ato Forson, a Deputy Minister of Finance and Ms Akua Sena Dansua, Ghana’s Ambassador to Germany.

The syndicated loan which is in its 24th time was oversubscribed by US$640 million and there is the opportunity to pick up an additional US$200 million when there is the need for it.

The facility comes with an all-inclusive rate of 1.468 per cent with a four-month moratorium and seven months repayment period, which starts in February 2017 and will be completed in August 2017.

The lead arrangers are Deutsche Bank, Natixis, Cooperative Rabobank, Bank of Tokyo Mitsubishi, Nedbank, Societe Generale, Standard Chartered Bank, Ghana International Bank and DZ Bank.

Dr. Opuni explained that the Board is committed to using the funds to improve the livelihood of farmers in the country and also ensure prompt payment of the purchase of cocoa beans from farmers.

“The loan facility will ensure that cocoa farmers in the country receives prompt payment for their produce,” he said.

Dr. Opuni explained that the cocoa industry was confronted with some challenges, including the decline in soil fertility, ageing cocoa farmers, overaged cocoa farms, climate change and cocoa swollen shoot virus.

Dr Opuni said the Government had supported cocoa farmers to improve upon the soil fertility of their cocoa farms through the free fertiliser distribution programme, fungicides and insecticides to cocoa farmers for spraying their farms against pest and diseases.

He said the government had distributed 50 million seedlings to cocoa farmers and increase it to 60 million seedlings in 2016 to support farmers to rehabilitate overaged cocoa farms, diseased farms and those starting new farms.

Dr. Opuni explained that all these interventions were expected to add another 500,000 metric tonnes to 750,000 tonnes of cocoa after the next 10 years to the current yield.

Production target

Cocobod is confident of purchasing between 850,000 and 900,000 tonnes of beans during the 2016/2017 crop year.

Mr. Amenyah confirmed that there are signs that this year the Board will attain its projected target.

Ghana operates a two-cycle cocoa year consisting of a 33-week main crop (October-June), which is mainly exported to Europe and Asia, and the minor light crop (11-week), which is discounted to local processing firms including the state-owned Cocoa Processing Company (CPC).

Ghana produced an unprecedented one million tonnes of cocoa during the 2010-11crop-year, thanks to good weather and improved farming techniques, but production declined to about 750,000 tonnes last season. Cocobod said cocoa production tends to fall slightly after a bumper year.

Government in 2015/16 crop year, announced to pay cocoa farmers an amount of GH¢ 6,720 per tonne, an increase in the producer price of cocoa from the 2014/15 season figure of 5,520 per tonne, despite a slump in the crop’s world price.

Ghana is the second-biggest producer of cocoa in the world, with an estimated 800,000 people said to benefit directly from cocoa production.