July 16, 2015

Parliament has approved a syndicated loan facility worth $US1.8billion to the Ghana Cocoa Board (COCOBOD) for the purchase of cocoa beans for the year 2015/2016 Crop Season.

Additionally, the House granted the Minister of Finance the power by Statute to waive US$18,000,000.00 worth of taxes on the US$1.8billion.

The loan facility is US$1million higher than what the COCOBOD secured in the previous crop season (US$1.7billion) for same task.

The approval was necessitated by a majority voice vote that approved and adopted the report of the Finance Committee on the above mentioned amount on floor of the House Wednesday.

The loan facility was secured between the Ghana Cocoa Board (COCOBOD) and a Consortium of Banks and other Financial Institutions, with the Government of the Republic of Ghana as Guarantor.

Per the terms of the trade finance facility, COCOBOD must collaterize at least 650,000 metric tons of the country’s cocoa beans to ensure that they repay the loan.

Production for the 2015/2016 crop season, according to officials of the COCOBOD, is pegged at 950,000 metric tons.

Chairman of the Finance Committee, James Klutse Avedzi, presenting the committee’s report said the amount will enable COCOBOD to buy all the cocoa beans produced by the farmers and will also inject some confidence in the economy.

The Ranking Member of the Committee, Dr. Anthony Akoto Osei, commenting on the issue said Parliament’s approval of the trade finance facility “will send a signal to the banks to mobilize enough money for the loan being requested.”

“Part of the reason for the loan facility is to help stabilize our currency since COCOBOD will give all the proceeds to the Bank of Ghana,” he added.

A member of the Finance Committee and MP for Akim Oda, William Agyapong Quaittoo, said the country expects the Cedi to appreciate against all the major trading currencies with the injection of the loan facility into the economy.