Come the 2012 to 2013 cocoa season farmers in the country would be assured of constant and prompt payment for their cocoa beans by the Produce Buying Companies on behalf of the Cocoa Board.
This is a result of the successful signing of the Ghana Cocoa Board US$1.5 billion one year receivables-backed trade finance facility (the “Facility”) in Accra early September. Proceeds of the Facility will be used to finance the 2012/2013 Ghanaian cocoa crop.
“This means that the days when cocoa farmers have to wait for days before they receive payment for their produce from the buying centres are over,” disclosed Mr Noah Amenyah, Public Affairs Manager, Cocobod.
He explained that the injection of this fund into the cocoa sector means that government will keep strictly to its guaranteed price even if prices on the international market fall, noting that “This is enough motivation for our cocoa farmers to produce more”.
He reiterated government’s commitments to the cocoa industry through the national cocoa rehabilitation programme, which seeks to help increase and sustain cocoa production in Ghana, through rehabilitation and replanting of old and diseased cocoa trees. It also involves the supply of 20million seedlings free of charge to farmers.
Also to benefit from this facility is the entire economy of the country. According to Mr Amenyah, the money, which will be deposited at the Bank of Ghana, will ensure that a lot of dollars is injected into the economy to release some of the pressure of the cedi.
Cocobod is a statutory public board established in 1947 under the responsibility of the Ministry of Finance and Economic Planning, which supervises Ghana’s cocoa industry. Ghana is the second largest cocoa exporter in the world and thus cocoa is a strategically important commodity for Ghanaian exports. Ghanaian cocoa is of superior quality and commands a premium.
In addition to Cocobod’s principal functions of purchasing, marketing and exporting of cocoa, it also promotes the production of the commodity, focusing on the maximisation of cocoa production and crop yield through agronomic research programmes and major logistic management investment.
The Facility, which was fully underwritten by the Initial Mandated Lead Arrangers, was oversubscribed and banks’ commitments were scaled back following a successful syndication. Standard Chartered Bank will act as Facility Agent and Ghana International Bank plc will act as Collection Agent.
Members of the syndicate include The Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Bank PLC, Citi, FirstRand Bank Limited (acting through its Rand Merchant Bank Division) HSBC, Industrial and Commercial Bank of China Limited, Natixis, Nedbank Capital, Rabobank International, Société Générale, Standard Bank, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation (the “Bookrunners”) and Ghana International Bank plc (together the "Initial Mandated Lead Arrangers” or “IMLAs”).
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