Business NewsEconomy

Ghana borrows up to $200 million from cocoa traders amidst loan challenges.

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Ghana’s Cocobod has borrowed between $150 million and $200 million from cocoa traders to finance bean purchases since the 2023/24 season opened due to a delay in securing a bank loan.

The regulator’s public affairs manager, Fiifi Boafo, informed Reuters that the challenges in obtaining loans from banks led Cocobod to explore alternative sources, such as loans from cocoa traders.

Each September, the industry regulator of the world’s second-largest cocoa producer secures an international syndicated loan to finance licensed buyers who purchase cocoa from smallholder farmers for export.

Cocobod plans to borrow $1.2 billion for this season, of which $800 million will come from a syndicate of lenders and $400 million from other sources, it previously said.

“But as the syndication process dragged on, it turned to traders to plug the funding gap. The funds will be repaid with the season’s harvest.

“We engaged with some of the buyers to give us capital for some of the purchase so that the capital is taken care of when we supply them the beans,” Mr Boafo said, without giving a specific amount accessed so far.

He said parliament would start approval processes for the agreements on the $800 million syndicated loan this week, after which Cocobod will reach out to partner banks for signing.