- Ghana COCOBOD predicts a $1 billion revenue loss as a result of the coronavirus outbreak.
- The Coronavirus outbreak stalled COCOBOD’s ongoing syndication process for loan facilities for the 2020/2021 crop season.
- COCOBOD fears the impact of the cocoa revenue loss on smallholder cocoa farmers.
The Ghana Cocoa Board (COCOBOD) has projected a $1bn dollar loss in cocoa revenue amid global price fall. This was confirmed by the Chief Executive of COCOBOD, Joseph Boahene Aidoo.
Aidoo, said the COVID-19 pandemic has also slowed the current support process for loan facilities for the 2020/2021 crop season. In march the COCOBOD had to postpone its loan signing due the coronavirus outbreak.
The deal is a syndicated term loan backed by receivables of $600m consisting of two tranches: a $250m seven-year development financing tranche and a $350m five-year commercial tranche.
Aidoo emphasised that the fall in cocoa prices has cost Ghana almost $1 billion loss in cocoa revenue.
“The buyers have closed their windows so we are not buying. The price of Cocoa has tumbled. Immediately it brings to Ghana a deficit of almost $1 billion. If this thing should continue, paying our farmers will be difficult.”
“We arranged everything until August so we signed in September. This time around, most banks out there have closed. It’s really affecting the industry and you know; cocoa is the backbone of the economy and once cocoa is affected, it means that the entire economy is going to suffer.”
COCOBOD was to use the lending facility to raise cocoa yields per hectare and to increase total production in Ghana.
The use of the loan facility by Ghana’s COCOBOD requires financial measures to increase the productivity of cocoa plants, develop irrigation systems, rehabilitate aged farms and those affected by disease.
The fund is expected to also help improve storage capacity and provide funding to local cocoa processing firms.
The cocoa industry in Ghana employs about 800,000 people and annually produces crops worth around $2 billion in foreign exchange. Cocoa is the largest agricultural export of Ghana and the country’s main cash crop.
COCOBOD also expressed fears over the Coronavirus’ devastating impact on the future of smallholder cocoa farmers.