$650m syndicated loan not invested at the bank – COCOBOD

COCOBOD says claims it has invested the first tranche of the $1.34 billion syndicated loan at bank with the hope of earning interest on the money are false.

“We do not invest monies earmarked for cocoa purchases with the banks,” COCOBOD said in a statement signed by its Chief Executive, Joseph Boahen Aidoo.

Minority Spokesperson on Finance, Cassiel Ato Forson accused COCOBOD of misappropriating $650 million being the first tranche of the syndicated loan, and is seeking to haul the Chief Executive of COCOBOD and the Minister of Agric before Parliament’s Finance Committee.

“I’ve written a letter to the Finance Committee Chairman, Mark Assibey, for him to convey an emergency meeting by inviting the Minister responsible for cocoa and the CEO of Ghana COCOBOD to appear before the Finance Committee,” he said.

According to Ato Forson, he is reliably informed that the first tranche of the loan has been diverted into other accounts to accrue interests instead of being sent to the Licensed Buying Companies (LBCs) for the purchase of cocoa beans.

“They have not given the Licensed Buying Companies [LBCs] the amount of money that they require to buy the cocoa from the farmers. Unfortunately, when we did further checks, the LBCs are saying that they have evidence, and they’ve heard that instead of Ghana COCOBOD giving the money to them for the purposes of buying cocoa, they’ve decided to put the money in their own accounts sitting at various banks. When that happens and it is proven to be the case, it amounts to gross misapplication,” he said.

Cocoa farmers in parts of the country especially the Western Region, have been on the neck of state-owned Produce Buying Company, PBC, over the non-payment of cocoa beans.

The Marketing Clerks representing the PBC, have had to play hide and seek with the cocoa farmers as they claim they are yet to receive money from government to pay the farmers.

But COCOBOD in its statement said it has released monies to the PBCs insisting that it has “sufficient funds to pay for cocoa purchases from the farmers.”

COCOBOD added that it has forwarded seed fund to deserving Licensed Buying Companies for cocoa purchases.

“Per the rules of the internal marketing of cocoa, COCOBOD has allocated Seed Fund to deserving Licensed Buying Companies for cocoa purchases. To ensure the safety of public funds, individual LBCs are required to submit bank guarantee to access the Seed Funds to make prompt payments to the farmers for cocoa purchases.”

“COCOBOD has approved additional Seed Fund of GH¢150 million to PBC and reimbursed the company GH¢147 million out of the initial GH¢390 million that they received at the beginning of the season. In total, PBC has been allocated GH¢687 million for cocoa operations. This amount is sufficient to purchase 90,523.07 tonnes of cocoa,” the statement added.

Read COCOBOD’s statement below:

The attention of Ghana Cocoa Board (COCOBOD) has been drawn to what it considers misinformation and attempts by a section of the public and political actors to incite cocoa farmers and other stakeholders to a situation of mistrust towards the Board.

We would like to urge cocoa farmers in particular, stakeholders and the general public to ignore such claims. The statement raised by the minority does not cover the real issues,but mainly seeks to createan erroneous impression that COCOBOD has diverted the funds meant for cocoa purchase into investments at the expense of cocoa farmers.

We wish to state the facts as follows:

The Ghana Cocoa Board drew the first tranche of USD650 million on 4^th October, 2018 from the USD1.3 billion syndicated trade facility for cocoa purchases.
Per the rules of the internal marketing of cocoa, COCOBOD has allocated Seed Fund to deserving Licensed Buying Companies for cocoa purchases.
To ensure the safety of public funds, individual LBCs are required to submit bank guarantee to access the Seed Funds to make prompt payments to the farmers for cocoa purchases.
Per the recommendations of the Producer Price Review Committee (PPRC), COCOBOD, within thirteen days reimburses individual LBCs that deliver cocoa to our three Take-Over Centres the full value (producer price, buyers’ margin and evacuation) to allow the companies to return the cash to the field for cocoa purchases.
By these arrangements, LBCs operating without any challenges with their bankers should NOT encounter difficulties in accessing the funds from their bank accounts to make prompt payments for cocoa purchases.
There are over 30 LBCs involved in cocoa purchases this season of which PBC is a part. PBC submitted bank guarantees up to GH¢390 million which qualified them, and COCOBOD duly released the GH¢390 million to the company at the beginning of the 2018/19 season to pay cocoa farmers.
Further, COCOBOD has approved additional Seed Fund of GH¢150 million to PBC and reimbursed the company GH¢147 million out of the initial GH¢390 million that they received at the beginning of the season.
In total, PBC has been allocated GH¢687 million for cocoa operations. This amount is sufficient to purchase 90,523.07 tonnes of cocoa.
However, since the 2018/19 season opened, PBC has reported purchases totalling 67,567.31 tonnes. PBC therefore has sufficient funds that can purchase additional 22,955.76 tonnes.
Per our records, PBC has disbursed GH¢330 million of the initial GH¢390 million for cocoa purchases. An outstanding amount of GH¢60 million released on 30^th October 2018 remains unaccounted for by PBC.
From the foregoing analysis, without any challenges with their bankers, the PBC should possess the financial capacity to pay cocoa farmers without delays.
As our mandate to protect the public purse demands, COCOBOD is obliged to ensure safer disbursement of the Seed Fund. We shall not disburse Seed Funds without a security.
To enable the LBCs that encounter difficulties in securing bank guarantees to access Seed Funds, we have concluded arrangements with the insurance commission so that qualifying insurance companies can step in and assist other companies with seed fund guarantee.
The claim by the Centre for Socioeconomic Studies (CSS) findings suggest that COCOBOD has “either refused, neglected, or failed to allocate funds to the Licensed Buying Companies, especially Produce Buying Company” is incorrect.
As a professional research agency, CSS should have contacted COCOBOD for the facts to avoid telling untruths to the general public. Such untruths only succeed at creating unnecessary tensions.
We do not invest monies earmarked for cocoa purchases with the banks. Currently, we have sufficient funds to pay for cocoa purchases from the farmers.
We call on individual LBCs to maintain good working relationships with their banks and ensure that Seed Funds paid into their bank accounts are used to pay for cocoa purchased from farmers.
COCOBOD is available to respond to public enquiries concerning the internal cocoa marketing and other operational areas of the industry.
We wish to assure our cherished cocoa farmers and industry stakeholders that their interest will always be protected. COCOCOB has well thought out strategies to ensure that all cocoa bought will be paid for and the loan paid according to the agreed schedule.