By Kingsley I. Ilechukwu and Celestine Okorie
Ghana Cocoa Board (COCOBOD) and lenders have welcomed the first disbursement of US$200 million of a syndicated loan facility to boost cocoa productivity in the world’s second-largest producer.
The occasion was marked by a ceremony held in Accra, Ghana on Tuesday June 23, followed online by hundreds of observers across the globe. In attendance were COCOBOD and government representatives and participating lenders, which included development finance institutions: the African Development Bank , the Japan International Cooperation Agency (JICA), the Development Bank of Southern Africa and Cassa Depositi e Prestiti Spa. Commercial lenders were represented by Credit Suisse AG, and the Industrial and Commercial Bank of China, London Branch.
The US$600 million syndicated loan agreement was signed in November last year at the Africa Investment Forum in Johannesburg. JICA and the African Development Bank agreed to provide US$3.5 billion in joint financing under the fourth phase of the Enhanced Private Sector Assistance for Africa Initiative.
“There are challenges with productivity in the country’s cocoa production, as well as with the systems in place for processing and the distribution of cocoa. By strengthening the cocoa bean-centric agricultural value chain and related industries, the facility will help COCOBOD to contribute to achieving Sustainable Development Goals,” said COCOBOD CEO Joseph Boahen Aidoo.
COCOBOD will use the facility to raise cocoa yields per hectare and increase Ghana’s overall production. Activities under the facility will include the allocation of financing to sustainably increase cocoa plant fertility, improve irrigation systems, and rehabilitate aged and disease-infected farms. The funds will also help increase warehouse capacity and provide support to local cocoa-processing companies.
“African countries like Ghana and Cote d’Ivoire produce nearly three quarters of the global supply of cocoa. This significant Bank-facilitated loan to COCOBOD aims to improve the quantity and quality of local processing, boosting incomes of local farmers and their communities and generating new and better jobs,” said African Development Bank Vice President for Agriculture, Human and Social Development, Dr. Jennifer Blanke, ahead of the event.
In March of this year, after the close of the syndication process, an amended agreement brought on board the Japan International Cooperation Agency (JICA), the Development Bank of Southern Africa and Cassa Depositi e Prestiti Spa, and other commercial lenders.
“This loan marks the first time JICA and the African Development Bank will be providing direct co-financing under the Enhanced Private Sector Assistance for Africa initiative (EPSA4) as well as being the first non-sovereign project,” said Chief Representative of JICA Ghana, Yasumichi Araki. “JICA will continue to commit to the cocoa industry in Ghana through innovative interventions to COCOBOD.”
JICA has supported COCOBOD to build capacity to quality-test cocoa beans. Ghana supplies 70% of all cocoa beans imported into Japan and cocoa is seen as one of the nation’s most essential import commodities.
The Development Bank of Southern Africa is also partnering with COCOBOD to further enhance Ghana’s position as one of the leading producers of cocoa in the world.