Business News of Friday, 13 April 2018
Ghana’s cocoa regulator, COCOBOD, wants to use the bulk of $600 million in finance that it’s planning to raise for the sector on projects to increase local processing and to replant diseased trees.
The world’s second-biggest cocoa producer also wants to spend funds on the rehabilitation of neglected farms, a project to pollinate trees by hand and to expand warehouse capacity, according to a document seen by Bloomberg.
The project is part of plans to raise the West African nation’s cocoa output and to enable it to hoard stock in times of a global oversupply.
Noah Amenyah, a spokesman for COCOBOD, declined to comment when visited at his office.
The board and the regulator of neighboring Ivory Coast, the largest producer, presented plans for their industries last month to the African Development Bank and other lenders during meetings in Ghana’s capital, Accra.
While Ghana Cocoa Board asked lenders for a 10-year facility, the banks indicated that they will consider loans for as long as five years, according to two people familiar with the matter.
The cocoa board aims to conclude a deal in the third quarter, the people said, who asked not to be identified because they’re not authorized to speak publicly about the matter.
The loan will be separate from the annual syndicated facility that Ghana procures to pay farmers.
Ghana is looking for funding even as the board is selling debt on the local market at interest rates of as much as 20 percent to cover its expenses. Last year, the regulator decided against cutting the rate it pays to farmers even after global prices for the beans dropped by more than a third.
The board has sold 1.7 billion cedis ($384 million) of 1-year and 182-day securities in the first three months of the year.
Ghana wants to distribute the $600 million in finance as follows to various projects, according to the document that was presented to lenders.