The Bank of Ghana (BoG) is expected to receive $910 million by October 2022 as the first tranche of COCOBOD’s $1.3 billion syndicated cocoa loan after it was approved by the Parliament of Ghana in July.
African News sites are reporting that the second tranche of $390 million will come in November 2022 and be spread over the next three months until February 2023. The Bank of Ghana is expected to draw down the funds from the Ghana International Bank in London, who are participating in the fundraising programme.
Upon receipt of the dollars, the Central Bank will transfer the cedi equivalent to COCOBOD to fund Cocoa purchases for the coming harvest season.
This additional cash flow could help boost the BoG’s reserves and strengthen the cedi, which has experienced a sharp depreciation in recent months. The cedi is not immune from the strength of the dollar and has depreciated by over 30% against the reserve currency since the beginning of 2022.
Ghana needs dollars to buy foreign goods, including fertiliser, in dollars, which is why having a strong foreign currency reserve is important, and why exports of Cocoa, which are priced in U.S. dollars, are vital to the economy.
Supporting the Cocoa Syndicated Loan fundraising programmes are Standard Chartered Bank, Rabo Bank, Ghana International Bank, French Investment Bank – Natixis, Industrial and Commercial Bank of China and Japan’s MUFG. They are expected to support and lead other banks in obtaining the funds.
Ghana borrows money every year to purchase Cocoa from farmers. In September last year, COCOBOD signed a $1.5 billion syndicated loan as part of the annual preparation for export to finance Cocoa purchases and operating costs for the 2021/22 season.
