COCOBOD is set to sign its annual cocoa loan syndication deal in Paris, France with some 24 French banks on Friday.

This was after it secured Parliament’s approval to borrow up to $1.5 billion to aid cocoa purchases for the 2019/2020 crop season.

Sources at COCOBOB say the board has already secured the extra $200 million from some of the banks.

The first tranche of the funds is likely to hit the Bank of Ghana’s accounts in the first week in October.

COCOBOD plans to use the funds to finance the purchases 950 000 cocoa beans.

Impact on the Economy

One of the immediate impacts the deal will have on the economy is that it will improve Bank of Ghana’s reverses, a situation that could give investors and currency traders some assurance about the central bank’s ability to defend the local currency.

The payment to the farmers and licensed buying companies will also improve liquidity in the banking system. The inflows of these funds will also help stabilise the cedi in the last quarter of this year.

Five of the financial institutions expected to lead the deal are ROBO-Bank, SG Bank, MUFG, NEBBANK, NET-IXIS.

How the 2017/2018 funds were utilized

According to documents submitted to Parliament, this is how the GH¢5.49 billion borrowed last year was utilised.

Seed fund to LBCs for cocoa purchases – ¢1.935, 325, 697.95

CTORs/Cocoa deliverables paid to LBCs - ¢2,813,860,155. 30

Inputs/CODAPEC and Hi Tech Expenses – ¢395,822,471.63

Operational Expenses - ¢382,796,675.12

Total - ¢5,497,805,000

The 2019/2020 syndicated loan would be drawn down in three tranches. First would be 50 per cent of the $1.3 billion, which would translate to about $650 million with an additional $450 million to be made in November.