Deputy Finance Minister, Kweku Kwarteng, has disclosed that Cocobod’s US$1.3bn syndicated loan would not add to government’s debt stock and that only a portion would be used for collateralization.
Mr. Kwarteng stated that: “We do not even need the entire US$1.3bn for collateralization, only a bigger portion of that would go for the purpose. The rest would go into the provision of related services, scholarships, and the construction of cocoa roads. The fear that we need some US$1.7billion for the collateralization in unfounded.
I would like to assure my colleagues that we have borrowed, that has not added to our debt stock as central government borrowing, why should we have a fear, it is because we considered that Cocobod can borrow on their own books and it would be counted as their own borrowing,†he said.
Minority Leader, Haruna Iddrisu had sought assurances from the Finance Ministry on the issue of default risk and other interest payments on Cocobod’s investment, whether is used in offsetting other activities of Cocobod.
His comments followed Parliament’s approval of the One billion, three hundred million dollars (US$1,300,000,000) for the purchase of cocoa for the 2017/2018 crop season.
The object of the facility is to raise adequate funds to enable Cocobod to purchase cocoa beans from farmers through licensed buying companies for 2017/2018 cocoa season.
The US$1.3billion trade finance is being provided by a syndicate of banks with Natixis, Standard Bank of South Africa Ltd, Credit Agricole Corporate and Investment Bank, Sumitomo Mitsui Banking Corporation(SMBC) and Ghana International Bank as the Initial Mandated Lead Arranger (IMLAs).
Section 32(6) of the Stamp Duty Act, 2005(Act 689) requires loan documents to be stamped at 0.5% of the loan amount.
In order to ensure that the trade finance facility is used solely for the purchase cocoa beans and related expenses, the facility was also exempted from the payment of Stamp Duty Act 2005 (Act 689) amounting to US$6.5m (US$6,500,000).
The CEO of Cocobod, Joseph Boahen Aidoo, noted that the funds would be used for the payment for produce from farmers, buyer margins, internal marketing operations, and farmers’ services, among others.
The projected cocoa purchases for 2017/2018 crop season is 850,000 metric tons, with the first expected drawdown by October, 2017 with the expected amount of US$700m (GHc3, 150million).
Cocobod is targeting a production of 850,000 metric tons, as a result, a number of measures have been put in place to assist it achieve the target.
Source: Business & Financial Times Ghana
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