For the first time in 32 years, international banks have rejected the Ghana Cocoa Board’s (COCOBOD) request for a pre-export financing loan, signaling a deepening crisis in Ghana’s cocoa sector.
In June 2024, COCOBOD sought a $1.5 billion loan to finance the purchase of up to 650,000 metric tonnes of cocoa for the 2024/2025 crop year.
However, the proposal failed to attract any interest from international financial institutions, a move attributed to COCOBOD’s declining credibility and the deteriorating state of the cocoa industry under its current management.
According to a statement issued by Dr. Cassiel Ato Forson, the Minority Leader in Parliament, the rejection is a direct consequence of the significant decline in cocoa production and the mismanagement of the sector over the past eight years.
The statement highlighted that cocoa production, which stood at 969,000 metric tonnes during the 2016/2017 crop year, has plummeted to just over 400,000 metric tonnes in the 2023/2024 season.
This drastic reduction in output has severely impacted COCOBOD’s ability to meet its contractual obligations. The organization has been unable to deliver approximately 250,000 metric tonnes of cocoa, forcing it to roll over these commitments to future contracts.
The banks, aware of these challenges, assessed COCOBOD’s projected production of 650,000 metric tonnes for the upcoming crop year and determined that 250,000 metric tonnes would be allocated to servicing existing rolled-over contracts.
This would leave only 400,000 metric tonnes for the 2024/2025 obligations, raising concerns about COCOBOD’s ability to repay the loan.
In the statement, Dr. Ato Forson detailed the financial difficulties facing COCOBOD, noting that the organization has recorded substantial losses for seven consecutive years under the Akufo-Addo/Bawumia administration, amounting to over GHS11 billion. The losses are as follows:
- 2017: GHS 395 million
- 2018: GHS 78.2 million
- 2019: GHS 320.6 million
- 2020: GHS 426 million
- 2021: GHS 2.4 billion
- 2022: GHS 3.2 billion
- 2023: GHS 4.2 billion
Dr. Ato Forson dismissed recent claims by COCOBOD that the organization had voluntarily decided not to borrow from foreign banks for cocoa purchases, describing the statement as a “face-saving” attempt to obscure the reality that COCOBOD is no longer considered creditworthy. He emphasized that the rejection by international banks reflects a loss of confidence in COCOBOD’s management and a breakdown of a 32-year tradition that had been a reliable source of foreign exchange for Ghana’s economy.
The Minority Leader’s statement underscores the urgency of addressing the crisis in Ghana’s cocoa sector. He called for competent management and a new direction, criticizing the current government for what he described as the complete mismanagement and destruction of the sector. He urged immediate action to restore the cocoa industry, which has been the cornerstone of Ghana’s economy since independence.
“The NPP government has shown clearly that it lacks the competence to manage the cocoa sector,” Dr. Ato Forson stated, adding that the continuous decline in production and financial losses demonstrate the need for a change in leadership and strategy.
Below is the statement issued by the Minority leaders Dr. Ato Forson
Source: www.kumasimail.com
