John Kwakye, the Senior Economist and Director of Research at the Institute of Economic Research, has expressed concern about the current state of Ghana’s cocoa sector.
He finds it disheartening that the country has to resort to borrowing to finance cocoa purchases, a key export.
In a post on his X page, Kwakye suggested that the Bank of Ghana and the Cocoa Board explore innovative ways to raise funds domestically instead of relying on external borrowing.
He wrote, “Isn’t it a pity that, as a country, we have to go outside to borrow money to purchase our main cash crop, cocoa? Since the crop is self-financing, can’t BoG and Gov’t find innovative means of raising the money domestically? Let’s think outside the box!”
Isn't it a pity that, as a country, we have to go outside to borrow money to purchase our main cash crop, cocoa? Since the crop is self-financing, can't BoG and Gov't find innovate means of raising the money domestically? Let's think outside the box!
— J. K. Kwakye (@JohnKwabenaKwa1) December 1, 2023
Recent unrest has arisen due to reports of the government’s struggle to secure the annual syndicated loan, attributed to banks’ concerns about the country’s debt levels.
A press release on November 10, 2023, detailed COCOBOD’s planned financing strategy for the 2023/2024 Crop Season.
The board aimed to diversify funding sources, utilizing both a refinancing arrangement with international buyers and a syndicated loan from lenders.
However, the latter was discontinued after weeks of engagement with buyers, leading to noncollateralized financing from cocoa sales proceeds.
COCOBOD asserted its ongoing efforts to secure the syndicated loan for the 2023/24 Crop Season, emphasizing that the necessary arrangements have been made and the loan is laid in Parliament for consideration and approval.