Ranking Member of Parliament’s Finance Committee, Isaac Adongo, has responded to the announcement made by the Minister of Finance, Ken Ofori-Atta, regarding his inclusion, along with the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, on the board of the Ghana Cocoa Board (COCOBOD) as an effort to rescue the financially troubled institution.
Ofori-Atta explained that a special team would also be established to oversee the future operations of the cocoa sector regulator, which has been burdened by substantial debts in recent times.
Isaac Adongo, in his response, dismissed the move and expressed skepticism when speaking to journalists. He asserted that this action would likely exacerbate the challenges already faced by COCOBOD.
“For instance, the BoG Governor instead of returning profit in 2022 only returned with a negative equity of GH¢55 billion and as if that is not enough, Governor Addison returned with a negative reserves of GH¢70 billion, wiping of the entire monetary base of our country,” he lamented.
“He (Governor Addison) has succeeded in creating the Central Bank into a policy insolvent institution which is now bankrupt and needs recapitalization,” he added.
Dr. Adongo went on to suggest that the combination of “Ken Ofori-Atta and Dr. Addison is like a poisoned chalice,” raising doubts about whether providing such a challenge to COCOBOD, which is already ailing, is a viable solution.
On a related note, Dr. Ernest Addison, the Governor of the Bank of Ghana, has indicated that the size of this year’s Cocoa Syndicated Loan is expected to decrease to approximately $800 million, a reduction from the initial figure of $1.2 billion. He clarified that this reduction is part of the debt sustainability measures outlined in the IMF program aimed at improving the macroeconomic conditions throughout the cocoa value chain.
Speaking during a joint press briefing by the IMF and the Ministry of Finance in Accra on October 6, 2023, Dr. Addison confirmed that the cocoa regulator, COCOBOD, will still receive the syndicated loan facility for the current year.
“I think that they’re still getting the syndicated loan this year but it’s just that the size of the syndication is gone from I think $1.2 billion to $800 million,” he noted.
Nonetheless, this development is anticipated to have an influence on Ghana’s cocoa production during the 2023/2024 crop season. It comes at a time when the government has reorganized cocoa-related financial obligations as part of the ongoing IMF program to attain a certain level of stability in managing the debt.
The Cocoa Syndicated loan serves as a means to enhance operations within the cocoa sector, which is among the nation’s most significant export commodities.