Cocoa Syndicated Loan: Massive drop in amount shows a dip in banking confidence – Bright Simons

Vice President of policy think-tank IMANI-Africa, Bright Simons, has said that the drop in amount for Ghana’s cocoa syndicated loan is not an indication of prudence on COCOBOD’s part but a drop in banking confidence.

From 2023, Ghana received $650 million, $900 million in 2007, $2 billion in 2011, $1.5 billion in 2012, $1.8 billion in 2016, $1.3 billion in 2020, the same amount in 2022, but $800 million is expected to be received in 2023, he said.

Bright Simons argues that Ghana had built a reputation over the years as far as the Cocoa Syndicated Loan is concerned but this reputation is dwindling as a result of the current state of affairs of the economy.

He wrote on his Twitter page on September 25: “Since Ghana secured the first receivables-backed syndicated loan of ~$143m for the 1992/1993 cocoa season from international banks, the facility has become one of the country's credit badges. This massive drop shows a national business reputation built over decades cracking badly.”

The Cocoa Syndicated loan is to boost activities in the cocoa sector as this is one of the country’s highest export commodities.

The Ghana Cocoa Board has been saddled with a myriad of challenges including its overwhelming debt levels.

The government restructured cocoa bills in order to achieve some stability with the debt levels. This was also part of Ghana’s criteria under the current International Monetary Fund programme.

SSD/NOQ

Ghana Cocoa Syndicated Loan Trend:

2003/2004 - $650m
2007/2008 -$900m
2011/2012 -$2b
2012/2013 -$1.5b
2016/2017 -$1.8b
2020/2021 -$1.3b
2022/2023 -$1.13b
2023/2024 -$800m

Cocobod will spin the massive drop in amount as due to prudence. Real reason: drop in banking confidence. pic.twitter.com/CWnTHu2MQ8

— Bright Simons (@BBSimons) September 25, 2023

Since Ghana secured the first receivables-backed syndicated loan of ~$143m for the 1992/1993 cocoa season from international banks, the facility has become one of the country's credit badges. This massive drop shows a national business reputation built over decades cracking badly pic.twitter.com/w8Mi4MRq93

— Bright Simons (@BBSimons) September 25, 2023