COCOBOD to Combine Self-Financing with Loan Syndication for 2024/25 Cocoa Season
The Chief Executive Officer of COCOBOD, Joseph Boahen Aidoo, has announced plans to combine a proposed self-financing model with traditional loan syndication if necessary for the upcoming 2024/25 cocoa season.
This move comes as Finance Minister Dr. Amin Adam has indicated that the government will be seeking external funding to support Ghana’s cocoa sector, which has faced financial and environmental challenges in recent years.
“We are starting the season with self-financing,” Mr Aidoo stated, referencing a model previously used during the June-August season, which COCOBOD now plans to scale up.
He emphasized that blending self-financing with borrowing (loan syndication), if required, should not be a point of concern. The shift to self-financing represents a departure from the 32-year-old syndicated loan regime, with a focus on having payments from overseas buyers sent directly to COCOBOD, rather than to lenders’ accounts.
Mr Aidoo further underscored that this new approach is aimed at stabilizing the local currency by providing a steady flow of dollars into the economy.
“Instead of waiting for a lump sum payment, we’ll have a consistent inflow of dollars, which will ease the pressure on the cedi,” he explained.
The announcement comes ahead of President Akufo-Addo’s expected introduction of a new cocoa pricing for the 2024/25 season, set to open on September 10, 2024.
Reports suggest a potential 45% increase in cocoa prices, a move likely influenced by rising farming costs and the detrimental effects of illegal mining on the sector. Farmers, burdened by these pressures, have called for the government to raise the price to at least 6,000 cedis per tonne.
Mr Aidoo has assured stakeholders that the forthcoming pricing regime will be favorable, promising to improve farmers’ incomes and livelihoods.
