The Ghana Cocoa Board (COCOBOD) has been forced to contract a loan from the Bank of Ghana (BoG) after last year’s syndicated loan was spent on non-core activities of the board.
COCOBOD will have to pay about 22 percent interest rate on a $200 million loan it contracted from the Central Bank to purchase cocoa beans from farmers.
Ghana raised $1.8 billion in a syndicated loan last year to pay for cocoa beans in the 2016/2017 crop season at a rate of about 1.5 percent.
However, COCOBOD was unable to pay for the beans and had to raise additional funds of $200 million through the Bank of Ghana at an interest rate of 22 percent.
According to the board, it raised the money in May this year to pay Produce Buying Companies.
Minister for Agriculture, Dr. Owusu Afriyie-Akoto, explained that the former management of COCOBOD misappropriated the funds meant for cocoa farmers.
“For cocoa roads they had a budget from the previous administration of GH¢1.6 billion, but when we took over, we realized that they signed contracts worth nearly GH¢5 billion. It just beats your imagination. This is just one piece of evidence that I’m giving you about mismanagement”.
Dr. Afriyie-Akoto was surprised about how the previous administration of COCOBOD squandered all the funds without recourse to the core mandate of the board.
“A budget has been approved by management to follow and then the board sits and oversee the quadrupling of what they themselves have set as ceiling. This is unthinkable and the cause of all the financial challenges COCOBOD is facing now.
“What is more revealing is that all the cocoa roads they captured that the money was used for do not exist. Those roads are not there. We have ordered investigations to help government proceed to the court,” he revealed.
Dr. Opuni’s Tenure
On February 2017, the assets and accounts of a former Chief Executive Officer of COCOBOD, Dr. Stephen Opuni were frozen by the Economic and Organized Crimes Office (EOCO) for what was described as rot under his administration.
Subsequently, the new board chairman of COCOBOD, Hackman Owusu Agyeman debunked the notion that the $1.8 billion were all invested in cocoa farms and farmers despite drops in the world price of the commodity.
World cocoa price
Meanwhile, cocoa price on the world market has seen no improvement after it took a nosedive.
Over the past year, cocoa price on the London Stock Exchange has dropped sharply from about $3,000 per metric ton to $1,800.
There are fears this will impact on expected revenue, particularly as COCOBOD has more debts on its loan book.
However, Dr. Afriyie-Akoto stated that government has put in the required measures to make COCOBOD more profitable.
<<Print>>