The Chief Executive Officer of the Ghana Cocoa Board (Cocoaboard), Randy Abbey, has acknowledged ongoing financial and liquidity challenges affecting cocoa purchases from farmers, while assuring that the government and key stakeholders are working to resolve the issue.
Speaking at a news conference, Abbey said the board is fully aware of the concerns raised by cocoa farmers regarding delayed payments, as well as issues highlighted by licensed banks about liquidity constraints.
He explained that the current situation stems from a disruption in the longstanding syndicated loan system that financed cocoa purchases.
“For over 32 years, Cocoaboard used contracts for the supply of raw cocoa beans as collateral to secure syndicated loans from foreign banks. This system provided seed money to licensed buying companies to purchase cocoa from farmers,” Abbey said.
He noted that the board began experiencing financial challenges in 2022, prompting the restructuring of CocoaBills due to an inability to service both interest and principal.
Abbey detailed that for the 2023-2024 cocoa season, CocoaBoard struggled to secure syndicated loans. “The first tranche of funds for the season was received on January 26, 2024, even though the season began in September 2023,” he said, underscoring the delay in financing and its impact on cocoa procurement.
The board also relied on a $70 million bridge financing from the Ministry of Finance to meet crop purchases.
The CEO highlighted that the old syndicated loan system required selling large portions of cocoa as raw beans, limiting value addition opportunities. “If you commit 70–75% of your crop to raw bean contracts, it becomes challenging to fulfill processing targets,” Abbey explained.
He assured that Cocoaboard, the Ministry of Finance, and the government are developing a new funding model that would address liquidity challenges while supporting value addition initiatives and ensuring timely payments to farmers.
Abbey concluded by emphasizing Cocoaboard’s commitment to resolving the issues quickly and maintaining the balance between financing, farmer payments, and cocoa processing.
This statement comes amid growing agitation from cocoa farmers over delayed payments and concerns about the sustainability of the cocoa financing system in Ghana.
Source :www.kumasimail.com
