COCOBOD earmarks US$190 million to pay Licensed Buying Companies
The Food and Agriculture Minister-designate, Dr. Owusu Afriyie Akoto, has disclosed that Cocobod will start paying debts owed to Licensed Buying Companies (LBCs) on Monday, February 22, 2021
According to him, about US$190m is expected to be paid to the LBCs.
Appearing before the Appointments Committee of Parliament on Friday, he explained that COVID-19 has hit the centers of chocolate consumption—America and Europe—which has caused the demand for chocolate and cocoa beans to fall.
He said this has affected the financing of the cocoa harvest since the availability of loans contracted by Cocobod from foreign banks to purchase cocoa is dependent on the volume of the crop that the board is able to sell.
“For the first time in many years, it has not been possible to sell enough contracts to enable the last tranche of about US$190m to be released. In fact, if you compare the number of contracts sold out compared to the same period last year, we are down by nearly one-third,” Dr. Akoto said.
He added that the central bank is considering a bridge loan for Cocobod to help it meet its obligations to LBCs.
State control of cocoa
Dr. Akoto also justified the state’s control of cocoa production, maintaining that it has served the country well.
He said this in answer to a question from a member of the committee on whether private sector or state control would work better for the country in terms of boosting cocoa production.
“The system that we have today was actually started in 1947, and it has served us well. We are just going through a transition period; we were the dominant force in world cocoa production for more than a century and a half. It is only in the last 20 years or so that Ivory Coast has taken over from us, so we should not despair.”
He explained to committee members that in the 1990s, Ghana and other African countries came under heavy criticism from the World Bank to liberalize their cocoa industries, adding that the country’s approach was to liberalize the local internal marketing of cocoa while leaving the core of the industry in the state’s hands.
Last year Cocobod and the African Development Bank (AfDB) signed a US$600 million facility to finance large-scale pollination of cocoa farms, expand tree pruning, construct warehouses, rehabilitate declining plantations, and increase local processing.
Cocobod is targeting to raise Ghana’s cocoa output from an average of 850,000 tonnes to more than 1m tonnes with the new investment from AfDB.
