COCOBOD begins self-financing cocoa season today
THE Ghana Cocoa Board (COCOBOD) will commence the new cocoa crop season today, September 10, 2024, with a new self-financing plan.
Joseph Boahen Aidoo, Chief Executive of COCOBOD, explained that the Board will initially implement the self-financing model and may integrate it with loan syndications if necessary to ensure a smooth transition.
“We are starting the season with self-financing, but we can combine this new model with existing loan syndications if needed. If successful, this approach could be adopted long-term,” he stated.
Aidoo noted that the self-financing model was tested during the large cocoa season from June to August and showed promising results. “We plan to scale this model further. Blending self-financing with traditional borrowing should not pose significant issues,” he added.
In preparation for the new season, Aidoo has been engaging with cocoa farmers from seventy districts across Ghana. These stakeholder consultations aim to address the financial and environmental challenges facing Ghana’s cocoa sector.
Aidoo announced the shift from COCOBOD’s 32-year reliance on syndicated loans to a self-financing system, where payments will be made directly to COCOBOD instead of bank accounts of lenders.
“Previously, payments for cocoa were made to lenders’ bank accounts. This time, payments will go directly to us, which will help manage the flow of foreign currency and reduce pressure on the local cedi,” he explained.
He believes the new system will mitigate the impact of currency depreciation by ensuring a steady inflow of dollars, rather than waiting for bulk payments on specific days.
Additionally, President Akufo-Addo is expected to announce new cocoa pricing for the 2024/25 season today . Preliminary sources suggest a potential price increase of nearly 45%. Given the rising cost of farming and the negative impact of illegal mining on the sector, farmers are advocating for higher prices. One farmer commented, “Considering the challenges we face, we hope the government will set the new price at least 6,000 cedis.” Aidoo assured farmers that the new pricing regime will be designed to enhance their incomes and improve their livelihoods, reflecting COCOBOD’s commitment to supporting the cocoa industry amidst evolving financial strategies.
