Ghana COCOBOD signs $1.5b finance facility with 36 banks

The Ghana Cocoa Board and a consortium of 36 banks on Monday signed a $1.5 billion trade finance facility for the purchase of cocoa during the 2010/2011 season.

This is 25 per cent more than the $1.2 billion raised last year.

Standard Bank was one of the joint Mandated Lead Arrangers (MLAs) for the transaction along with Crédit Agricole, International Commercial Bank of China, Ghana International Bank and Sumitomo Mitsui Banking Corporation.

The transaction was oversubscribed at $1.834 billion and the borrower increased the facility size to $1.5 billion.

“What we have witnessed this morning is a reflection of the confidence that investors have in the Ghanaian economy. Indeed, Ghana is emerging as one of the frontier economies with a potential to attract significant foreign investment,” Dr Kwabena Duffuor, Minister of Finance and Economic Planning, told participants at the signing ceremony.

“To all the banks that participated in this year’s syndication, I say thank you for the interest and confidence shown in the Ghanaian economy and the cocoa industry in particular,” he said.

Dr Duffuor said despite the earlier difficulties, the economy had begun to pick up with growth expected to bounce back to at least 6.5 per cent in 2010 from 4.1 per cent in 2009.

He said the cocoa industry would continue to play its important role in the economy despite the coming on stream of oil and gas, adding the government had in place measures to support the industry to increase production to one million tons by 2012.

“Government will continue to support the expansion of cocoa production in the country by providing the necessary financial incentives to cocoa farmers, supporting improved farming practices and generally making the industry attractive to young and energetic Ghanaians and foreign investors,” Dr Duffuor said.

Mr Anthony Fofie, Chief Executive Officer of Ghana Cocoa Board, congratulated the participating banks for helping realise the facility.

“Today, the international financial markets have spoken, the markets are more confident in the Ghana Cocoa Board and the economy of Ghana than we had envisaged,” he said.

Mr Fofie said the Board would continue to maintain its enviable record on the international financial market and continue to broaden the horizon of collaboration among players.

Mr Alhassan Andani, Managing Director of the bank, said Cocoa was a strategic economic commodity for Ghana both as a significant contributor to Gross Domestic Product and as a consistent source of foreign exchange earnings.

“It is therefore necessary for us as a bank to promote and enhance the industry and we are happy to do this,” he said.

Established in 1947, Ghana Cocoa Board is the chief proponent of the production, processing and marketing of cocoa, coffee and sheanut.

Ghana is the second largest cocoa beans exporter in the world after Ivory Coast, providing approximately 18 per cent of the world cocoa supply.

Source: GNA