The Ghana Cocoa Board (COCOBOD) has announced its decision to self-finance the upcoming 2024/2025 cocoa season, ending its reliance on an annual syndicated loan from foreign banks for the first time in 32 years.

Speaking at a press conference in Accra, COCOBOD's Chief Executive Officer, Joseph Boahen Aidoo, explained the rationale behind the bold decision.

"For the first time in COCOBOD's history, we want to wean ourselves from the offshore syndication. Since 1992, COCOBOD has always relied on external borrowing from a consortium of banks, but after 32 years, it is time we learned our lessons and took control of our finances," Mr. Aidoo said.

The decision so self-finance, he revealed, had been under consideration since last year, and with recent developments, COCOBOD determined that the time was ripe to move away from the syndicated loan model.

"We were assessing the whole situation, and we concluded that we have to take a bold measure," Mr. Aidoo stated.

This ends the longstanding practice of securing offshore loans to purchase cocoa beans for export.

Mr. Aidoo noted that by not accessing the offshore loan this year, the board could save around $150 million in interest payments and other costs associated with receiving a loan facility.

While COCOBOD's move to self-finance is expected to bring significant savings, it also raises concerns about Ghana’s foreign exchange reserves and the stability of the cedi.

The syndicated loan which usually ranges from $1.2 billion to $1.8 billion has traditionally been a major source of foreign currency inflows for the country, and its absence could exert pressure on the Cedi’s exchange rate.

Amid this concern, COCOBOD has revised its production target for the upcoming season, lowering it from 810,000 tonnes to 650,000 tonnes. This adjustment is due to adverse weather conditions in key cocoa-growing regions, particularly in Brong Ahafo and Western North, where unusual dryness has affected cocoa trees.

Despite the challenges, Mr Aidoo reassured Ghanaians that the cocoa sector remains sustainable. He dismissed concerns that the industry could collapse within five years, stating that COCOBOD is implementing various initiatives to address issues like climate change, pests, diseases, and illegal mining.