COCOBOD refutes cedi depreciation’s impact on repayment of dollar syndicated loan

COCOBOD has ruled out any negative impact of the cedi depreciation on its dollar syndicated loan repayment.

According to the Corporate Affairs Manager of COCOBOD Noah Amenyah, due to the sale of the beans in dollars on the international market, the depreciation of the currency has no bearing on the loan which was contracted in dollars.

The loan which according to the regulator, they are on track with its repayment is expected to be fully paid by the end of the season which ends in August to pave way for the new crop season which begins in September the same year.

COCOBOD in 2017 secured an amount of $1.3 billion for the purchase of cocoa beans for the 2017/2018 crop season following an approval of a syndicated loan by Parliament.

However, there are fears looking at the current depreciation of the cedi, COCOBOD may need more cedi to pay back this loan.

But speaking to JoyBusiness Noah Amenyah, said trading in dollars protects them from the currency fluctuations.

“We took the loan in dollars and we pay back in dollars, also we trade in dollars and that is not a challenge. This is because the currency we are paid in is dollars after we have sold the cocoa. In view of that, we will not be affected at all.

Maybe when we come to the local market you will see that the cedi is weaker considering its strength against the dollar,” he said.

Mr.Amenyah further stated that “but the current trend with the Cedi would be factored into the setting of the new producer price index for the new cocoa season in 2018/2019.”

The facility was provided for by syndicate banks, comprising Natixis, Standard Bank of South Africa Ltd, Credit Agricole Corporate and Investment Bank, Sumitomo Mitsui Banking Corporation and Ghana International Bank as the initial mandated lead arranger.

The facility, which is an equivalent of GH¢5.850 billion, will be used for the payment of produce from farmers, buyers margins, internal marketing operations, farmers services among others.

It is also expected to help increase cocoa production to more than one million tonnes per annum within the next four years.

The facility according to COCOBOD has a concessionary component of 35.97 per cent, slightly above the government concessionary requirement of 35 per cent and an interest rate of 1% per annum, a service charge of 0.75% per annum, a commitment charge of 0.5% per annum, a grace period of five years, repayment period of 25 years and a 30-year maturity period.

Source: JoyBusiness