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Tuesday, July 16, 2024

Produce audited report to show COCOBOD lacked funds in 2017

Former Chief Executive of COCOBOD, Dr. Stephen Kwabena Opuni, has flatly dismissed claims by his successor, Joseph Boahen Aidoo, that COCOBOD was facing significant financial challenges before he assumed office in January 2017.

Dr. Opuni has therefore challenged Mr. Boahen Aidoo to publish the audited financial report of COCOBOD as documentary evidence to support his claims. This would enable the public to ascertain the true state of affairs at COCOBOD at the time, he said.

“It is trite knowledge that before you secure any loan, you need to show your audited financial statement, therefore if Joseph Boahen Aidoo wants Ghanaians to know that he inherited a broke institution, he should make COCOBOD’s audited financial statement for 2016/2017 financial year public to back his claims,” Dr. Stephen Opuni is quoted to have said in a statement issued by his office on Thursday, June 13, 2024.

Mr. Boahen Aidoo, in an interview with Accra-based Joy FM on June 12, 2024, claimed “They bought about 600,000 metric tonnes before we came in. With cocoa, the peak harvest period is October, November, December, and January.”

“So, within the first quarter of the season, from October to December 2016, the previous administration bought over 600,000 metric tonnes. When we assumed office, there was no money, meanwhile, we had to buy cocoa till the end of the season from January to September (2017).”

In response, Dr. Stephen Opuni, in an interview on June 13, 2024, rubbished the claims made by Mr. Boahen Aidoo.

Although COCOBOD secured a $1.8 billion syndicated loan, it was used to cover COCOBOD’s activities from the October 2016 to September 2017 cocoa crop season. Mr. Boahen Aidoo conceded that part of it was used to purchase over 600,000 metric tonnes.

According to Dr. Opuni, COCOBOD sold forward a little over 600,000 tonnes of cocoa at a value of $2,993.60 per tonne, which was used as collateral to secure the $1.8 billion syndicated loan from banks in Europe and other parts of the world.

“Just multiply USD 2,993.60 by the over 600,000 stated by Mr. Boahen Aidoo and you would come to the realization that, as at January 2017 COCOBOD had already bought enough cocoa from our cocoa farmers to pay off the 1.8 billion dollars syndicated loan COCOBOD secured,” Dr. Opuni said.

Available records show that even after buying over 600,000 metric tonnes between October and December 2016, as mentioned by Boahen Aidoo, by January 2017, Licensed Buying Companies (LBCs) still had some of the funds COCOBOD had advanced to them, which they were expected to use to buy more cocoa for the Ghana Cocoa Board, Dr. Opuni said.

According to Dr. Opuni during his tenure as Chief Executive at COCOBOD, from January 2014 to early January 2017, COCOBOD secured syndicated loans on three occasions (2014/2015, 2015/2016, 2016/2017) at a cost of about 1.5% (one and a half percent) for each loan.

“There was always the option to go back to the syndicated banks for an additional loan of about 200 million US dollars if COCOBOD realized that there was more cocoa to be bought.”

This, according to Dr. Opuni, was more prudent to take a loan at a cost of about 1.5% (one and a half percent) instead of going for a loan from the local banks for 30 percent or more.

“It is therefore strange that the current management of COCOBOD under Boahen Aidoo, instead of taking advantage of the 200 million dollars option from the syndicated loan banks, they always resort to the local banks and the Central Bank. This is nothing short of gross financial mismanagement.”

Dr. Opuni said, “From January 2014 to early January 2017, COCOBOD after taking the syndication loan, never took loans from the Central Bank/local banks to undertake any COCOBOD activity.”

According to the Reuters news agency, COCOBOD is unable to deliver 350,000 tonnes of cocoa to its clients abroad who already have contracts with COCOBOD.

According to reports, these cocoa contracts were executed by COCOBOD to those clients at USD 2,600 per tonne. Meanwhile, the current world price of cocoa is above USD 9,000 per tonne.

This means in the future, if COCOBOD is to deliver the 350,000 tones to its clients, Ghana may lose about USD 6000 or more per tonne of cocoa.

Per reports, Ghana therefore stands to lose about USD2 billion because COCOBOD is unable to deliver its current contracts of about 350,000 metric tonnes of cocoa.

A global data and business intelligence platform, Statista gives the breakdown of cocoa production in Ghana in metric tonnes from 2014 to 2024 as follows:

Cocoa Crop Year Production in Metric Tonnes
2013/2014 – 896,220
2014/2015 – 740,254
2015/2016 -778,044
2016/2017 -969,511
2017/2018 – 904,739
2018/2019 -811,747
2019/2020 -766,977
2020/2021 -1,047,000
2021/2022 -683,000
2022/2023 – 654,000
2023/2024 -Projected at 500,000

COCOBOD’s annual report and financial statements presented to Parliament show that COCOBOD is in dire financial crisis.

Cocoa Crop Year Loses in Ghana Cedis
2016/2017 395 million
2017/2018 78.2 million
2018/2019 320.6 million
2019/2020 426 million
2020/2021 2.4 billion
2021/2022 3.3 billion
2022/2023 4.2 billion
2023/2024 Projected 2.6 billion



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