Dr. Randy Abbey
The Chief Executive Officer of the Ghana Cocoa Board (COCOBOD), Dr. Randy Abbey, has appealed to stakeholders in the cocoa value chain, particularly farmers and licensed buying companies (LBCs), to remain patient as the Board works to settle outstanding payments.
Addressing the media on Friday, Dr. Abbey said COCOBOD is collaborating with the Ministry of Finance to address key challenges confronting the sector, beyond the debts owed to farmers and LBCs.
“We know these are very difficult times for farmers, and we appeal to them to keep faith with us. COCOBOD and the Ministry of Finance are working to find a solution to the problem very, very soon,” he said.
Cocoa farmers and the Minority in Parliament last week accused the government of failing to honour debts owed to LBCs, many of which relied on bank loans and off-taker support to pre-finance cocoa purchases.
However, Dr. Abbey explained that the current challenges largely stem from structural financing issues within the cocoa sector. He noted that cocoa purchases in Ghana are mainly financed by buyers rather than directly by COCOBOD.
For more than three decades, he said, COCOBOD relied on syndicated loans, using contracts for the supply of raw cocoa beans as collateral to secure financing from foreign banks. Portions of these funds were advanced to LBCs as seed money to purchase cocoa from farmers.
According to him, COCOBOD’s financial position weakened significantly in 2022 when it became unable to service both interest and principal payments on cocoa bills, leading to a restructuring of its obligations.
This development, he said, sent negative signals to the market and made it extremely difficult for COCOBOD to secure syndicated loans for the 2023/2024 season, nearly resulting in the collapse of the long-standing financing arrangement.
Dr. Abbey further disclosed that although COCOBOD has sold about 530,000 tonnes of cocoa for the current season, approximately 50,000 tonnes remain unsold due to high prices, prompting financiers and buyers to shift to other competitive markets.
“As I speak to you, we have sold over 530,000 tonnes of the crop. We have a little under 50,000 tonnes that we are yet to find buyers for, and that is when buyers started shifting,” he said.
He revealed that COCOBOD, which currently has an outstanding debt of GH¢32.91 billion, defaulted on some forward sales in the 2023/2024 crop season after failing to deliver all 333,760 tonnes under contracts it had signed.
Touching on reports about the purchase of vehicles, Dr. Abbey explained that COCOBOD recently acquired some vehicles for operational purposes to replace about 70 percent of its overaged fleet across various divisions.
He stressed that the vehicles were funded solely from internally generated funds, specifically proceeds from the sale of cocoa sample residues to local processors, and not from money meant for farmers, contrary to claims on social media.
On cocoa road projects, he said the original financial commitment of GH¢26 billion was reduced to GH¢6.9 billion in 2023 and has now been further cut to GH¢4.35 billion as part of government efforts to reduce the company’s overall financial burden.
By Ebanezer K. Amponsah