COCOBOD reeling under a GHS 14bn debt – Mahama says
The Ghana Cocoa Board (COCOBOD), according to former President John Mahama, is debt-distressed being unable to settle some GHS 14bn owed licensed produce buying companies (PBCs).
According to Mr Mahama, the GHS 14bn debt has crippled the State institution making it difficult to for COCOBOD to pay bills owed PBCs and their suppliers (farmers).
The inability of COCOBOD to pay debts owed PBCs, Mr Mahama further noted, has also resulted in the inability of PBCs to pay salaries of its workers.
“COCOBOD is currently reeling under a debt of about GH¢ 14 billion and is severely distressed, putting further strain on government finances.
“The astronomical debt has so crippled COCOBOD and made it impossible for them to pay bills due the licensed buying companies and their suppliers,” he stated.
“This debt overhang has affected the Produce Buying Company, which is currently unable to pay the salaries of its workers.
“Indeed, similar liabilities within other state-owned enterprises amount to a staggering GHS 30 billion and is impacting the public debt,” he added.
The former President made the above assertions delivering an address on the economy themed Building the Ghana We Want at the University of Professional Studies, Accra on Thursday, October 27.
Meanwhile, COCOBOD has secured some $1.13bn to make cocoa beans purchases from farmers for the 2022/2023 season.
The secured loan amount was lower than the targeted $1.3bn loan amount due to an increase in the interest rate of the loan facility by some 25 basis points (0.25%).
Interest rate on the loan facility was hiked from 1.5% to 1.75% by the consortium of banks and financial institutions lending the amount to COCOBOD.
Gov’t raises farmgate price from GHS 660 to GHS 800
Fixed farmgate price paid to cocoa farmers has been raised by 21% by government from GHS 660 to GHS 800 per bag [64kg] for the 2022/2023 season.
The increment in the farmgate price by government is higher than the 15 to 20% increment demanded by the Ghana Civil-Society Cocoa Platform (GCCP).
Announcing the new farmgate price, Minister for Agriculture, Dr. Owusu Afriyie Akoto, speaking at a press briefing said the cedi depreciation against the dollar prevented government from increasing the figure beyond 21%.
“We are all aware of the depreciation of the cedi this year. This means government will have to take some cut.
“We are pleased to announce that government has increased the producer price of cocoa by 21% from ¢10,560 per tonne to ¢12,800.00 per tonne. The producer price represents 89.99% of the net FOB value.
“This figure translates into ¢800 per bag of 64 kg. gross weight and takes effect from Friday, 7th October, 2022”, he stated.
Adding that, the 21% rise in the producer price of cocoa is a testament to government’s resolve to ensure farmers earn a decent income and make cocoa farming lucrative.
He further stressed that government will continue to implement initiatives to build a robust, resilient and sustainable cocoa industry where cocoa farmers and their communities will thrive.
“To ensure a decent standard of living for Ghanaian cocoa farmers after retirement, government will from November 2022 move from the pilot phase to the implementation phase of the Cocoa Farmer’s pension scheme. The scheme remains an unprecedented achievement under President Akufo-Addo,” he stated.
Cocoa production in Ghana is down sharply this year, seen at 689,000 tonnes on Sept. 1 after a previous forecast of 800,000 tonnes. This has prompted the International Cocoa Organization (ICCO) to upwardly revise its forecast for a global cocoa deficit.
The lower yields partially result from farmers using less fertilizer, with prices having increased worldwide due to high energy prices and supply disruption caused by Russia’s invasion of Ukraine.
