Investors left scrambling after COCOBOD defaults on matured securities
Ghana Cocoa Board (COCOBOD) has defaulted on payments of its matured 182-day bill for the first time, rolling over outstanding securities of GH¢940.4 million, without the consent of investors.
This sudden default has raised concerns among investors, who are now questioning the ability of COCOBOD to redeem upcoming obligations in light of projections by the International Cocoa Organisation (ICCO) about cocoa prices dipping in 2023.
The default on the 182-day bill is a significant blow to the cocoa industry, a major contributor to the country’s economy, and has led to confusion and concern among investors expecting payments to be made on these securities.
Market information suggests that the outstanding payments were made to investors who were credited, but later had the credit reversed and automatically rolled over without their consent.
This move has led to frustration and uncertainty among investors, many of whom are now deciding whether to sell their securities to willing investors or seek legal redress.
The default is a major blow to investor confidence in the capital markets, and it may lead to investors shying away from Treasury bills.
The Ghana Cocoa Board is a government-owned entity that is responsible for the regulation and development of the cocoa industry in Ghana, which is the second-largest producer of cocoa in the world.
The default on the 182-day bill is a significant blow to the industry, and it is not yet clear how the government plans to address the situation.
It is also worth mentioning that this default comes at a time when the government is undertaking a domestic debt exchange program amid massive resistance from investors, although it has been taking measures to address issues raised, but the default on the 182-day bill is a major setback for the government’s efforts.
The Ghana Cocoa Board has yet to make an official statement on the matter, and it is not yet clear what steps it will take to address the situation. The default on the 182-day bill is a serious matter, and it is important that the government and the cocoa board take immediate action to address the situation and restore investor confidence in the capital markets as the future of the Ghanaian economy, and the cocoa industry, depend on it.
