IEA’s Dr. Kwakye applauds COCOBOD’s bold move to ditch syndicated loans, calls for innovative financing
Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), has expressed strong support for the Ghana Cocoa Board’s (COCOBOD) decision to forgo syndicated loans for the upcoming cocoa season. He criticized the syndicated loan approach as flawed and advocated for innovative financing solutions.
Dr. Kwakye’s remarks follow COCOBOD CEO Joseph Boahen Aidoo’s recent announcement that, for the first time in 30 years, the organization will not seek offshore syndicated loans to finance cocoa bean purchases for the 2024/2025 season. Instead, COCOBOD aims to fund the procurement of approximately 650,000 metric tonnes of cocoa beans entirely through domestic operations.
Aidoo explained that after years of relying on international financial markets, COCOBOD has learned valuable lessons and is now committed to self-financing. The board also reduced its seasonal target from 810,000 tonnes to 650,000 tonnes, citing the significant savings from avoiding high interest payments, which amounted to nearly $150 million last year.
In a post on his X platform, Dr. Kwakye called the syndicated loan model “flawed and unnecessary,” suggesting that the Bank of Ghana should step in to fund cocoa purchases at moderate interest rates, with repayment coming from the proceeds of cocoa sales. He urged for more creative financial strategies, emphasizing that such a move would save COCOBOD substantial funds and reduce reliance on costly international loans.
