Ghana Cocoa Board (COCOBOD) will later today sign a $1.5 billion Syndication Loan for the 2021/2022 cocoa crop season.

The facility, which is the largest deal in sub-Saharan Africa, will be used to finance cocoa purchases and related operational activities in the crop season.

The signing comes on the back of some positive developments in Ghana’s cocoa sector.

COCOBOD exceeded its production target to reach a record 1.06 million metric tons for the 2020/21 season, beating the previous record of 1.024 million metric tons in the 2010/ 2011 crop season. Also, global demand for cocoa is projected to grow by 2.2% for the next crop season.

Since the 1992/93 crop season, COCOBOD has consistently and successfully, through the pre-export syndicated finance facility, obtained a receivables-backed syndicated loan each year from the international money market to finance its cocoa purchases.

The latest loan facility, which has an interest rate plus libor of 1.75%, is repayable in seven calendar months and projected to help purchase about 900,000 metric tonnes of cocoa.

Cocoa/Cedi buffer

So far, the cedi has depreciated by about 1.30% to the US dollar, selling at about ¢6.25 to the US dollar on the interbank forex market.

Analysts have however calmed market sentiments about the recent persistent depreciation.

This is because the local currency will be bolstered by the expected COCOBOD Syndication Loan as well as other developments.

Importantly, the current pricing of the cedi to the dollar is also within range of many research institutions forecast for the year.