By: Michael Eli Dokosi
Ghana’s Cocobod is close to securing a US$600 million loan package from the African Development Bank (AfDB) Goldstreet Business has learnt.
The AfDB has provided US$150 million while the rest is to come from bank syndication.
AfDB President; Akinwumi Adesina submitted at an investment forum in Johannesburg: “The last time the price of cocoa collapsed, Ghana lost $1 billion. Ivory Coast lost over $1 billion. We must be smarter than that.”
The funds will allow Ghana’s cocoa regulator erect new warehouses to stockpile beans and protect itself against volatility on the cocoa market.
The AfDB board is expected to approve the deal within this week. Ghana and Ivory Coast are seeking a combined US$1.2 billion loan from the bank which will be used to increase output and militate against volatile prices.
Ghana and Ivory Coast account for 60 percent of the global cocoa supply but both countries have little say when it comes to pricing, an observation Adesina rightly points out.
“If you have to constantly sell your beans, you don’t control anything. You just dispose of them. You’re essentially a market price taker. So that needs to change in terms of the volumes you are actually putting into the market.”
Ghana has meanwhile maintained the guaranteed price it pays farmers at GHS7,600 per tonne for the 2018/19 main crop harvest.
Agric Minister, Dr. Afriyie Akoto announced in October: “The 2018/19 cocoa season which starts on Friday, October 5, has been officially announced. The government in consultation with stakeholders has decided to maintain the producer price for cocoa at GH₵7,600 per tonne or GH₵475 per bag of 64 Kilograms (KG).”
It is hoped with the injection of the US$600 million loan package, farmers who are the lifeline of the sector will also see their lot improved.