Ghana’s $1.8 Billion Loan for 2016-17 Cocoa “Is All Gone”

(Reuters) – The $1.8 billion syndicated loan Ghana procured to purchase cocoa for the 2016-17 season “is all gone” and the country must seek more funding to make purchases for the rest of the season, the new chairman of industry regulator Cocobod said.

Ghana is the world’s second biggest producer of cocoa behind neighbouring Ivory Coast and the crop is one of its top foreign exchange earners along with gold and oil.

“The syndicated loan of $1.8 billion that we had hoped to use for this production year unfortunately … is all gone and we are yet to finish the purchase of the crops. So it falls on us to immediately try and organise some financing to carry on the process,” Hackman Owusu-Agyemang said at a swearing-in ceremony on Tuesday.

The lack of funds helps explain complaints by licenced cocoa buyers in February that delays in the release of Cocobod financing was hindering their ability to purchase beans needed to fill their supply contracts.

President Nana Akufo-Addo took power in January after winning a December election and his government has set about cleaning up what it says are numerous examples of wasteful spending by the previous administration.

Cocobod must tackle a debt overhang of at least 5 billion cedis ($1.1 billion) and will review all contracts signed by the previous government, said Owusu-Agyemang, adding that some of them looked “out of place”, without giving further details.