Ghana’s Cocobod has adopted a new strategy of borrowing between $150 million and $200 million from cocoa traders to guarantee a smooth start to the 2023–2024 cocoa season. The regulator’s Public Affairs Manager, Fiifi Boafo, stated that the decision was made in response to challenges it had in getting a bank loan for financing bean purchases.
Traditionally, the industry regulator of the world’s second-largest cocoa producer secures an international syndicated loan every September to fund licensed buyers who purchase cocoa from smallholder farmers for export. For this season, Cocobod had initially planned to borrow $1.2 billion, with $800 million coming from a syndicate of lenders and $400 million from other sources.
However, due to the prolonged syndication process, Cocobod sought assistance from cocoa traders to bridge the funding gap. Boafo assured that the funds would be repaid with the proceeds from the season’s harvest.
“We engaged with some of the buyers to…give us capital for some of the purchase so that the capital is taken care of when we supply them the beans,” Mr. Boafo stated, though he did not specify the exact amount accessed from traders.
Parliament is set to initiate the approval process for the $800 million syndicated loan later this week. Once approval is granted, Cocobod will proceed to finalize agreements with partner banks.