The Cocoa Board of Ghana (Cocobod), the agency that oversees the cocoa industry, will sign a $1.3 billion loan agreement with international banks this Thursday to finance cocoa bean purchases for the 2022/23 season, a spokesman for the agency said Wednesday.
Ghana, the world’s second-largest cocoa producer behind Ivory Coast, uses loans from international banks each year mainly to finance the purchase of beans. The two West African countries represent about 60% of the world’s cocoa supply.
The financing facility is between Cocobod and a consortium of banks and financial institutions with the government as guarantor, said Cocobod spokesman Fiifi Boafo. Parliament approved the loan in July.
Analysts say the deal will inject much-needed foreign currency liquidity into the domestic economy and reduce the high demand for dollars, while boosting consumer demand and reducing inflation.
Ghana’s national currency, the cedi, has been one of the worst performing currencies in Africa this year, losing about 30 percent of its value against the dollar.
Cocoa production in Ghana is down sharply this year, with 689,000 tons as of September 1, down from the previous forecast of 800,000 tons. This has prompted the Abidjan-based International Cocoa Organization (ICCO) to raise its forecast of a global cocoa deficit.