Ghana's Cocoa Board (COCOBOD) will sign a $1.3 billion (€1.4 billion) pre-export syndicated loan agreement with international banks on Thursday (29 September) to finance beans purchases for the 2022/23 season, the board's spokesperson said on Wednesday.
Ghana, the world's second largest cocoa producer behind Ivory Coast, uses loans from international banks every year mainly to finance bean purchases. The two West African countries account for around 60% of global cocoa supply.
The finance facility is between Cocobod and a consortium of banks and financial institutions with the government as the guarantor, Cocobod spokesperson Fiifi Boafo said on Wednesday.
Parliament approved the loan in July, despite efforts to overcome an economic crisis and a nearly $2.5 billion balance-of-payments deficit.
Foreign Exchange Liquidity
Local currency observers believe the loan will inject much-needed foreign exchange liquidity into the economy and reduce surging dollar demand, while strengthening consumer demand and reducing inflation expectations.
Ghana's Cedi currency has been one of Africa's worst performing currencies this year, having lost around 30% of its value against the dollar in that period.
Cocoa production in Ghana is down sharply this year, seen at 689,000 tonnes on 1 September after a previous forecast of 800,000 tonnes. This has prompted the International Cocoa Organisation (ICCO) to upwardly revise its forecast for a global cocoa deficit.
The lower yields partially result from farmers using less fertiliser, with prices having increased worldwide due to high energy prices and supply disruption caused by Russia's invasion of Ukraine.