Ghana’s Parliament on Thursday approved a $1.3 billion syndicated loan to finance the purchase of cocoa for the 2022-23 season.

The receivable-backed trade finance facility is between the Ghana Cocoa Board (COCOBOD) and a consortium of banks and financial institutions with the government as the guarantor.

Ghana, one of the world’s two top cocoa producers with Ivory Coast, borrows money every year to purchase cocoa from farmers.

The loan was approved despite efforts to overcome an economic crisis and a nearly $1 billion balance-of-payments deficit.

With inflation at 29.8% in June, a debt-to-GDP ratio up to almost 85%, and the cedi currency losing nearly a quarter of its value this year, the government has had to turn to the International Monetary Fund (IMF) for help stabilizing the economy.

OCOBOD also cancelled the remaining $250 million of a $600 million loan it secured from the African Development Bank in 2019.

The cancellation was mainly due to uncertainties over crop forecasts and unfavourable cocoa prices, according to the Parliament Finance Committee report.