Source: newsthemegh.com
The first $600 million of a $800 million syndicated loan was signed by Ghana’s Cocoa Marketing Board (COCOBOD) with banks, and it is anticipated to be withdrawn as soon as this week.
Ghana, the country that borders Ivory Coast and is the world’s second-largest producer of cocoa, pays farmers for their beans through an annual syndicated loan.
This year’s loan has been delayed as the West African nation struggles with its worst economic crisis in a generation and attempts to restructure its bilateral and commercial debts. Normally, loans of this kind are agreed upon at the beginning of the season in September.
COCOBOD The company’s toughest transaction since Ray Ankrah joined, the deputy CEO, said to Reuters.
It has been signed, and the drawdown is being worked on. He stated that the terms of the loan had not altered from those that were submitted to parliament last month. “We’re drawing down $600 million by the end of this week and we expect to draw down the $200 (million) in the middle to the end of January,” he said.
The transaction was approved by the Ghanaian parliament in November, enabling the COCOBOD board to complete the necessary documentation with the participating banks.
COCOBOD will pay interest of approximately 8% under the parameters that were submitted to lawmakers. This includes a margin of 2.65% and the one-month Secured Overnight Financing Rate (SOFR), which is now approximately 5.3%.
A central bank official told Reuters, requesting anonymity, that this week’s decrease should increase the nation’s reserves.
Economist Professor Agyapomaa Gyeke-Dako of the University of Ghana stated that the loan might stabilize the local cedi by reducing demand for dollars, which has been fueled by the poor progress in reorganizing the nation’s bilateral debt.
Due primarily to unfavorable weather, Ghana and Ivory Coast anticipate their lowest cocoa harvests in recent memory.
For the 2023–2024 growing season, COCOBOD has officially projected production of roughly 800,000 tons; however, industry sources have told Reuters that they believe Ghana will harvest closer to 600,000 tons.
Among the lowest loans in a decade is the $800 million one.
Prior to this, Mr. Ankrah told Reuters that COCOBOD intended to sell a portion of the nation’s harvest on the spot market in order to profit from the all-time high prices for cocoa throughout the world.