Economy

BoG, banks agree on disbursements over cocoa bills

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The Bank of Ghana (BoG) has agreed with the Ghana Cocoa Board and commercial banks to use COCOBOD’s investments held at the various banks to pay its customers who may not agree with the decision to rollover the Cocoa bills.

The BoG, in a release, noted that while Cocoa bills, like the Bank of Ghana bills, were designed as instruments to be held just by financial institutions, unfortunately some financial institutions sold their instruments to their retail clients.

The move to allow the banks use COCOBOD’s investments with them to pay such clients is, therefore, to help reduce the cash flow challenges on the retail holders.

The release, however, noted that the financial Institutions have agreed to roll over their cocoa bills investments after an attempt by the Bank of Ghana to reissue a new six-month Cocoa bill to raise fund to cover the maturing obligation failed.

On Thursday, January 19, a six-month Cocoa bill with face value of GH¢940.42 million matured and the central bank went through the usual process to reissue on behalf of COCOBOD, a new Cocoa bill to raise funds to pay the matured bills.

Unfortunately, this auction failed and was severely undersubscribed, resulting in a shortfall of GH¢ 855.42million.

There were media reports that COCOBOD had failed to honour its Cocoa bills obligations and had rolled over the bills without even informing investors.

But after a meeting held on Friday, January 20 among the banks, COCOBOD and Bank of Ghana, it was agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155.

“COCOBOD has assured us that the outlook for the 2023 crop season is good and Cocoa purchasing are ahead of last year.

“We, therefore, expect that this short-term cash flow challenges facing COCOBOD will be resolved soon to enable it meet its obligations to investors,” the release noted.

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