COCOBOD’s debt securities swap another haircut by Gov’t – Joe Jackson
Joe Jackson, Director of Business Operations at Dalex Finance, has raised concerns over the Cocoa Board of Ghana (COCOBOD)’s invitation for holders to voluntarily exchange their short-term cocoa bills for new ones, labeling it as yet another form of financial restructuring akin to a “haircut.” Mr Jackson suggests that this move indicates the government’s inability to meet its financial obligations.
The call for the exchange, according to him, serves as a means for the government to spread out the maturities due in August over a period of five years, reflecting its challenges in honoring payments on their scheduled due dates. Starting in 2024 and continuing through 2028, both principal and interest payments on the cocoa bills will be made.
Mr Jackson places blame on COCOBOD for the default on its cocoa bills, highlighting what he perceives as mismanagement within the organization. He criticizes COCOBOD for its failure to publish accounts since 2020 and suggests that the board, responsible for cocoa purchasing, has diverted funds towards activities outside of its core mandate.
The financial operations of COCOBOD have drawn widespread criticism, with concerns raised regarding its large staff size and management practices. Mr Jackson views this situation as indicative of deeper issues within COCOBOD, emphasizing the need for improved management and greater transparency within the organization.
The voluntary exchange offer by COCOBOD has intensified discussions around the financial challenges faced by the government and its agencies. The implications of this move and its impact on the cocoa industry and broader fiscal stability remain subjects of ongoing analysis and debate.
The Ghana Cocoa Board (COCOBOD) has taken a significant step towards optimizing its funding structure by introducing a debt securities exchange programme, according to an official statement released on July 14, 2023.
The initiative aims to invite holders of COCOBOD’s short-term debt securities, known as Cocoa Bills, to voluntarily exchange them for longer-term debt securities with comparatively lower coupon rates.
Under the Exchange Programme, COCOBOD plans to issue longer-term bonds with an aggregate principal amount of approximately GHS 7.93 billion. These bonds, designed to align with the programme’s terms outlined in a comprehensive set of documents, including an Exchange Memorandum, Trust Deed, and Agency Agreement, are expected to offer improved terms and conditions for investors.
