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| Budgetary Controls Are Adopted by Cocobod Despite GHS12.3 Billion in Debt |
Budgetary Controls Are Adopted by Cocobod Despite GHS12.3 Billion in Debt
Johnson Akuamoah Asiedu, the Ghanaian Auditor-General, has expressed alarm over the Ghana Cocoa Board's (Cocobod) growing debt load, which as of September 2020 was estimated to be around GH12.30 billion.
A total of GH8.49 billion in short-term cocoa loans, GH1.14 billion in AfDB loans, GH174,295 in BADEA loans, GH1.4 billion in BoG 10-year loans, and GH1.28 billion in medium-term loans are all contributing to the debt accumulation.
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Our review of the COCOBOD documents revealed that the Board has historically been encumbered with a sizable loan portfolio. As of the end of the 2019/2020 fiscal year, the Board's records showed indebtedness totaling GH$12.3 billion. Additionally, we discovered from our assessment that the Board failed to offer us any efficient strategy to lower its
Finance.
Response from COCOBOD
However, COCOBOD management said in a
response that the institution is enforcing more stringent
budgetary restrictions to prevent debt accumulation
but instead start saving money to pay off all of its debts.
One of the tactics is to issue a bond worth up to US$
Refinancing the comparatively pricey cocoa bills will cost $3 billion.
Long-term debt is anticipated to be significantly less expensive.
to be utilized in order to restructure the short-term cocoa bills that
a high price.
For the 10-year BoG loan, COCOBOD observed a
balance that is being serviced is around GH1.39 billion.
depending on an agreed-upon repayment arrangement with the Bank of
Ghana. The suspension of principal repayment
sum was exhausted in January 2022, although it anticipates to
The financial performance of the Board over this time period has decreased by 33% as a result.
From GH9.76 billion in revenue in 2019 to GH10.27 billion in 2020, there was a 5.2 percent gain.
The increase in revenue was largely attributed to a higher export price per tonne of US$2,477 in 2020 compared to an average export price of US$2,236 for 2019. COCOBOD recorded a 4.41 percent decrease in cocoa production over the previous year.
In 2020, the Board's liquidity ratio (current ratio) increased from 0.75:1 in 2019. Despite the increase, the Board won't be able to pay its short-term debts when they become due.