The Parliament in Ghana approved a US$1.3 billion syndicated loan facility for the Ghana Cocoa Board (COCOBOD).
The loan is intended for purchasing cocoa beans from farmers and financing other operations of the Board for the 2020/2021 crop season.
The Parliament also passed a US$6.5 million request for waiver of stamp duty on the receivables-backed trade finance facility between the Board and consortium of banks and financial institutions under provisions of the Stamp Duty Act, 2005.
With the interest rate set at one-month LIBOR plus 1.75% per year, the commitment fee for the facility is 0.62% per year and upfront fees 1.25% flat.
Based on the operational requirements of the Board, the facility is expected to be reduced in two tranches in October 2020 and latest by February 2021.
Repayment of the principal is to be affected by seven equal monthly instalments beginning February 2021 and ending August 2021.
The operational areas for the payment of the facility include cocoa disease and pest control, fertiliser distribution and application, cocoa roads, farmers’ wards’ scholarship, industry inputs, rehabilitation, child education support and replanting.
Share of the net Free On Board (FOB), include an indicator of buyers or sellers become liable for goods being transported on a vessel and also include buyers’ margin, hauliers’ margin, storage and shipping operations, disinfection, grading and sealing finance cost.
The Finance Committee’s report on the facility, signed by Chairman and Member of Parliament (MP), Dr Mark Assibey-Yeboah, showed that the projected cocoa tonnage for the year under review was suspected to be 900,000.
According to the report, GH¢661.3 million has been allocated for the fertilisation of cocoa farms across the country. A decline from GH¢880.8 spent on the same activity in the 2019/2020 season in which only 850,000 tonnes of cocoa were received.
Officials of the Board explained this inconsistency. According to them, agronomy practices require that cocoa fertilisation takes a break after every three years.
Therefore fertiliser application for the 2020/21 season has been evaluated, taking into consideration the level of fertiliser application for the past three years.
Dr Assibey-Yeboah stressed the importance of the sector to the country’s economy hence the need for the facility for the Board to offer its activities.
Cocoa is very critical to the health of Ghana’s economy. Indeed the amount of time and resources we put into oil exploration, perhaps if we applied those amount of resources to cocoa and the agriculture sector, we might be better off.
Kwame Agodza a member of the Finance Committee
He urged that the facility was channelled to the purposes for the improvement of cocoa farmers and the country.
