In an unprecedented development, the Minority Caucus in Parliament has claimed that international banks have for the first time in 32 years rejected the Ghana Cocoa Board’s (COCOBOD) request for a prepayment loan of $1.5 billion, aimed at financing the purchase of cocoa for the 2024/2025 crop year.
The Minority Leader, Dr Cassiel Ato Forson, in a statement, pointed out that the rejection is primarily due to the declining health of COCOBOD and the significant downturn in Ghana’s cocoa sector under the current management, signalling a critical juncture for the nation’s historically robust cocoa industry.
“In June 2024, COCOBOD issued a Request for Proposal of $1.5 billion loan to purchase up to 650,000 metric tonnes of cocoa for the 2024/2025 crop year. But this request did not attract any interest from the international banks due to the poor health of COCOBOD and the collapse of the cocoa sector under its present management”.
Dr Cassiel Ato Forson, MP, Ajuamko Essiam Enyan Constituency and Minority Leader.
In his scathing critique, the NDC Member of Parliament for Ajumako Essiam Enyan Constituency pointed out that cocoa production has witnessed a dramatic decline under the current New Patriotic Party (NPP) government.
According to Dr Ato Forson, from a peak of 969,000 metric tonnes during the 2016/2017 crop year, inherited from the National Democratic Congress (NDC) administration, production has plummeted to just over 400,000 metric tonnes in the 2023/2024 season.
This sharp reduction, Dr Ato Forson argued is indicative of deeper systemic issues within the cocoa sector, which he stressed have been exacerbated by mismanagement under the New Patriotic Party administration led by President Akufo-Addo and Vice President Dr Mahamudu Bawumia.
Highlighting the direr implication of the decline in cocoa production, the Minority leader stated that the sharp decline in cocoa production has not only affected COCOBOD’s revenue but also its reputation and creditworthiness on the international stage.
He alleged that the inability of COCOBOD to supply approximately 250,000 metric tonnes of cocoa, leading to a rollover of the contractual obligation, has further eroded confidence in COCOBOD’s management.
Dr Ato Forson stressed that the banks’ decision was influenced by doubts over COCOBOD’s ability to meet its obligations for the 2024/2025 crop year, particularly given the projected shortfall.
“Clearly, the banks came to the conclusion that out of the projected production of 650,000 metric tonnes of cocoa for the 2024/2025 crop year, which is doubtful, 250,000 metric tonnes will be used to service existing rolled-over contracts, leaving only 400,000 metric tonnes to honour COCOBOD’s obligations for the 2024/2025 crop year. This raised the ability to pay question for the banks, hence their refusal to participate”.
Dr Cassiel Ato Forson, MP, Ajuamko Essiam Enyan Constituency and Minority Leader
Financial Losses and Crisis in the Cocoa Sector
Moreover, the Minority Leader, Dr Cassiel Ato Forson pointed out that the crisis facing COCOBOD is further highlighted by its financial losses, which have escalated under the current government.
He claimed that COCOBOD over the past seven years has recorded persistent losses, stating that in 2017 alone COCOBOD made a loss of GHS 395 million, following a loss of GHS 78.2 million in 2018, GHS 320.6 million in 2019, GHS 426 million, 2020, GHS 2.4 billion, 2021, GHS 3.2 billion, 2022 and finally GHS 4.2 billion, 2023.
These losses, totalling over GHS 11 billion, according to Dr Ato Forson underscore the severity of the mismanagement of the country’s cocoa sector.
Minority Leader’s Criticism and Call for Action
Dr Cassiel Ato Forson, MP for Ajumako Essiam Enyan Constituency and Minority Leader, sharply criticized the government’s handling of the cocoa sector.
He dismissed COCOBOD’s recent announcement that it had voluntarily decided not to seek foreign loans for cocoa purchases as “false, unmeritorious, contrived, and face-saving.”
Dr Ato Forson also argued that the decision was forced upon COCOBOD by the reality of its deteriorating creditworthiness, marking the end of a 32-year tradition that had reliably bolstered Ghana’s economy with foreign exchange to support the cedi.
“The NPP government has completely mismanaged and destroyed the cocoa sector. After seven years of decline in production and consecutive losses, the government has shown clearly that it does not have the competence to manage the cocoa sector which has since independence been the mainstay of the Ghanaian economy”.
Dr Cassiel Ato Forson, MP, Ajuamko Essiam Enyan Constituency and Minority Leader
Dr Ato Forson’s statement highlighted the urgency of the crisis and called for immediate action to salvage the country’s sector.
He urged for competent management and a new direction to restore the health of COCOBOD and revive the cocoa industry, which remains a critical pillar of Ghana’s economy.
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