The medium-term facility is also intended to be used to address the fundamental challenges in the cocoa sector.
Addressing the media in Accra via telephone after the signing of the syndicated loan agreement, the Chief Executive Officer of COCOBOD, Mr Joseph Boahen Aidoo, said COCOBOD was currently seeking for an additional US$300 million from these banks.
He said although the annual syndicated loan facility comes in handy to support the productivity enhancement programmes and payment to farmers for their beans, it could not be relied upon to address the challenges in the sector.
He said COCOBOD had a number of programmes such as irrigation projects, rehabilitation of diseased and old farms, expansion of warehouse capacities, improvements of roads that link cocoa communities and promotion of domestic consumption of cocoa.
“These are largely capital based projects which requires medium to long-term financing and not an annual facility,” he stated.
He said addressing some of these challenges with annual loans, which were meant for the purchase of cocoa beans from the farmers, put a lot of pressure on COCOBOD.
He said as far as the fundamental challenges remained, it would be difficult for COCOBOD to realise the full potential of the syndicated loan agreement.
“Some friends in the international financial sector have responded positively and we urge all lenders who may not have been aware of this call to join in this laudable idea,” he noted.
Justifying its decision to scout for a medium-term loan facility, he said “when it is medium term, you have a moratorium of two years so it gives you some briefing space for you to use the amount effectively.”
He said COCOBOD with its counterparts from Cote d’voire was also currently in discussion with the African Development Bank (AfDB) for a medium- term loan of US$1.2 billion which would be shared equally among the two countries.
“This one is also a medium term facility of seven years so it gives you the space and time to organise the industry to be able to repay. The gestation period for cocoa is three years so we expect that by the seventh year the cocoa would have matured for us to commence repayments of such facilities,” he explained. — GB