Bank of Ghana Receives First Tranche of $800 Million Cocoa Loan

In a significant development for Ghana’s economic landscape, the first tranche of the Cocoa Syndicated Loan has been successfully credited to the Bank of Ghana’s account, amounting to an impressive $541 million.

This inflow, received on December 22, 2023, marks the initial installment of the $800 million loan sanctioned by Parliament in November 2023.

The Trade Facility Agreement, approved by Parliament based on the Finance Committee’s recommendation, paved the way for the Ghana Cocoa Board (COCOBOD) to finalize paperwork with participating banks.

The agreed-upon terms dictate an interest rate of nearly 8%, inclusive of the one-month Secured Overnight Financing Rate (SOFR) at approximately 5.3%, and a margin of 2.65%.

The Bank of Ghana is set to transfer the dollar equivalent of the funds to COCOBOD, which, in turn, will deploy the resources to support the purchase of cocoa beans from farmers through licensed buying companies for the upcoming 2023/2024 Crop season.

The immediate impact of this financial infusion is expected to bolster the reserves of the Bank of Ghana, positioning the Central Bank to provide robust support for the national currency, the cedi.

Already, the news of COCOBOD finalizing the deal with various banks has contributed to the stabilization of the cedi, showcasing the far-reaching effects of the Cocoa Syndicated Loan on Ghana’s economic stability.

As the nation eagerly awaits the subsequent tranche of approximately $200 million, slated for transfer in January 2024, anticipation is high for the continued positive influence on the nation’s economic landscape.