The initial installment of the Cocoa Syndicated Loan has been successfully deposited into the Bank of Ghana’s account, with approximately $541 million inflows recorded on December 22, 2023. This amount constitutes a portion of the overall $800 million loan, with the second tranche of around $200 million scheduled for transfer to the Central Bank’s account in January 2024.

Trade Facility Agreement Approval

In November 2023, Parliament granted approval for the Trade Facility Agreement involving the Ghana Cocoa Board (COCOBOD), following the Finance Committee’s recommendation. This authorization allowed COCOBOD to proceed with finalizing the necessary paperwork with participating banks. The terms, as presented to lawmakers, stipulate that COCOBOD will pay an interest rate of nearly 8%, encompassing the one-month Secured Overnight Financing Rate (SOFR), currently standing at approximately 5.3%, along with a margin of 2.65%.

Utilization of Funds

The Bank of Ghana is expected to convert the received dollars into the cedi equivalent and transfer the funds to COCOBOD. These funds will be utilized by the market regulator to support the procurement of cocoa beans from farmers through licensed buying companies for the 2023/2024 crop season.

Impact on the Economy

The immediate consequence of this financial injection will reflect in the Bank of Ghana’s reserves, potentially placing the Central Bank in a robust position to bolster the cedi. The news of COCOBOD finalizing the deal with various banks has already contributed to stabilizing the cedi, demonstrating a positive impact on the economy.