Minority chides government for misapplying US$650 million cocoa loan

Business News of Monday, 26 November 2018

Source: Graphic.com.gh

2018-11-26

Cassiel Ato Forson

The Minority in Parliament has accused the government of diverting the first tranche of the US$1.3 billion cocoa syndicated loan for the 2018/19 crop year. They claim the loan has been diverted into areas that will not directly benefit farmers and serve the purpose for which the loan was taken.

According to the Minority, the first tranche of the loan, US$650 million, has been released and received by the Bank of Ghana on October 6, this year.

The Minority in a statement signed by its Ranking Member on the Finance Committee and a former Deputy Minister of Finance, Mr Cassiel Ato Forson, said although the loan was contracted to ensure that Licensed Buying Companies (LBCs) have adequate funds to promptly pay cocoa farmers, COCOBOD had not released the monies to the LBCs, hence resulting in delayed payments to cocoa farmers.

The Minority is of the view that the first tranche may be sitting in secured investments in a couple of banks, earning interest whilst the ordinary cocoa farmer is suffering.

It noted that the action by the government amounts to “a grievous misapplication of the funds and constitute an unacceptable breach of financial regulations.”

Below is the statement The Minority in Parliament has noted with concern that the first tranche of the US$1.3 billion cocoa syndicated loan for the 2018/19 crop year has not been used for the intended purpose. The first tranche of $650m cocoa loan syndication has been released and was received by the Bank of Ghana on the 6th October 2018.

As part of measures to ensure that Licensed Buying Companies (LBCs) have adequate funds to promptly pay cocoa farmers, part of the first tranche of $650m of the US$1.3 billion facility was supposed to be used to finance the smooth operations of Licensed Buying Companies (LBCs), especially, Produce Buying Company (PBC). The rationale for this policy direction is to ensure that the ordinary cocoa farmer is paid on time.

The Minority is however very disappointed that the funds have not been used for the intended purpose but rather diverted into areas that will not benefit the cocoa farmer in anyway. A statement issued by PBC Limited on the 22nd November 2018 indicated that about GHC104 million of cocoa taken-over receivables (CTORs) due LBCs has not been paid.

The recent findings from the work of the Center for Socioeconomic Studies (CSS) has revealed that COCOBOD has either refused, neglected or failed to allocate funds to the Licensed Buying Companies (LBCs), especially, Produce Buying Company (PBC) as mandated for cocoa purchases which has resulted in delayed payments to our hardworking cocoa farmers, hence undermining the well-being of the farmer.

The Minority has noted reports that the proceeds from the first tranche may be sitting in secured investments in a couple of Banks earning interest whilst the ordinary cocoa farmer is suffering. This would amount to a grievous misapplication of the funds and constitute an unacceptable breach of financial regulations.

We demand that the Hon. Minister responsible for cocoa immediately end the misapplication of the syndicated loan and revert to the original purpose for its acquisition. The CEO of COCOBOD must also be compelled to do the right thing. All allocations due Licensed Buying Companies (LBCs), especially, Produce Buying Company (PBC), must be released as soon as possible to ensure that our loyal cocoa farmers are paid on time.

The Minority in Parliament will not relent in our efforts in ensuring that the welfare of the cocoa farmer comes first.

Thank you.

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