Ghana’s cocoa sector regulator, COCOBOD, has signed an $800 million syndicated loan agreement with international banks to support the 2023/24 crop season for cocoa purchases, Reuters has reported.

According to the portal, Deputy Chief Executive Officer of COCOBOD, Ray Ankrah, disclosed this on Tuesday December 19, 2023 while indicating the regulator expects a quick drawdown of the funds by the end of this week.

This makes it the most expensive loan for the annual crop season for cocoa purchases at the highest interest on record in decades. International banks pledged to lend the funds at almost 8 percent.

"I joined COCOBOD in 2018 and this is the hardest transaction we have had. It's been signed and we are working on the drawdown. We're drawing down $600 million by the end of this week and we expect to draw down the $200 (million) in the middle to the end of January," Ray Ankrah is quoted to have said by Reuters.

Ankrah also told Reuters that the terms of the loan had not changed from the one presented to Parliament back in November this year after the House gave the nod to COCOBOD to finalize and complete the paperwork of the deal with participating banks.

Under the current terms of the transaction presented to Parliament, COCOBOD will pay an interest of nearly 8%, making it the most expensive loan secured in decades.

The deal includes one-month Secured Overnight Financing Rate (SOFR) which is currently around 5.3% and a margin of 2.65%.

Prior to this, the 2023/24 cocoa crop season had suffered delays as COCOBOD could not secure the funds on time due to the ongoing debt restructuring programme.

Ghana is now the second-largest producer of cocoa after Ivory Coast. The two countries account for almost 70 percent of global supplies for cocoa beans.

MA/NOQ

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