Barring any unforseen circumstances, an amount of US$1.13billion is expected by government following Ghana Cocoa Board (COCOBOD) pre-export receivables backed trade finance facility agreement with a consortium of international financial institutions to finance cocoa purchases for the 2022/2023 cocoa season. The money will hit the accounts of Bank of Ghana (BoG) tomorrow, October 26, 2022.
The facility, which would attract an interest rate of 1.75 percent, will also be used to finance operational activities within the crop season.
COCOBOD launched the facility to the market on August 23 2022 for an amount of US$1 billion and elected to upsize the facility to US$1.13 billion as a result of oversubscription.
The signing ceremony for this year’s facility took place at the Cocoa House in Accra.
Surprisingly, for the first time the embattled Finance Minister, Ken Ofori-Atta, was present to witness the signing.
Expectations from the cocoa syndication loan were as the forex is needed to shore up the falling local currency, the Cedi.
Mr Ofori-Atta expressed gratitude to the board and management of COCOBOD and the financial partners, particularly, the Standard Charted Bank for “shepherding” the facility to its success.
He said the signing gives reason for optimism in the Ghanaian economy.
“So, I believe it is time for us to have the kind of optimism that will raise Ghana and a black star up where it should be. Yes there continues to be a great future for our country and I think this will ring around the globe and give impetus to our negotiations [with the International Monetary Fund],” he said.
Similarly, Dr Ernest Addison, the Governor of the Bank of Ghana, expressed confidence that the finance facility will help stabilise the economy.
“Every Ghanaian has suffered from the impact of the depreciation of the currency, which has raised the cost of living and we are looking forward to being able to minimise the impact of the depreciation of the currency on the standard of living of Ghanaians, and this particular inflow helps very much in achieving that objective,” he said.
The Standard Chartered Bank, Coöperatieve Rabobank, Industrial and Commercial Bank of China (ICBC), MUFG Bank Ltd, Natixis and Ghana International Bank plc were the Initial Mandated Lead Arrangers for the facility.
Bank of China Limited, London branch joined the facility as Senior Mandated Lead Arranger, while DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main and the Arab Bank for Economic Development in Africa (“BADEA”) joined as Mandated Lead Arrangers. Ecobank joined as Arranger. The OPEC Fund, United Bank for Africa PLC, Ahli United Bank B.S.C. and Federated Hermes Inc joined as Lead Managers. AfrAsia Bank Limited, Citibank N.A, Absa Bank Ghana Limited and GCB Bank Plc joined as Managers.
Meanwhile, Information Minister Kojo Oppong Nkrumah has said that a lot more inflow of forex is expected following the completion of the $1.13billion syndication of COCOBOD.
He explained that stakeholders are going to be looking at long-lasting measures to ensure that forex rate is stabilized in the country.
Addressing a press conference, the Ofoase Ayirebi lawmaker revealed that the meeting between the Bank of Ghana, and some Managing Directors of Banks and forex bureaux was part of moves to stabilize the forex market.
“The Bank of Ghana will be meeting the Managing Director of some of the Banks and the heads of the forex bureau association to hold discussions aimed at ensuring that the supply of forex on the market is stabilized and the overpricing is halted so that, those who need forex for business get it without hindrances at the banking halls as against rates on the black market or some other quarters,” he said.
He added “We will also be looking at long-lasting measures to ensure that forex rate is stabilized in the country, even as we expect a lot more inflow of forex following the completion of the syndication of the COCOBOD transaction loan.
Concerns have been raised against activities that are affecting the forex market.
For instance, President of the Ghana Union of Traders Association (GUTA) Dr Joseph Obeng had indicated that there is a powerful association behind black market operations in Ghana.
He explained that these operators mostly receive up to date forex information that sometimes the regulated operators do not even have.
“Who is giving them this information?” he asked.
There is a cartel which is being built by black market, it is dangerous. Who is giving them the rate, it is a cartel.
“People are shying away from the main stream banks and and doing businesses with the Black markets.”
The Bank of Ghana, together with the Ghana Police Service, on Tuesday September 20, 2022, conducted a special operation on foreign exchange (forex) parallel market operators otherwise known as black market operators at identified hot spots within Business District (Rawlings Park, Tudu, Cowlane, Circle, Kimbu, Timber Market and Lava) and throughout the country.
By Vincent Kubi