Ghana intends to raise funds for its agricultural sector and use $600 million from the funds on plans that will see to the increase of domestic processing and rejuvenation of diseased plants, as it seeks to raise cocoa output and enable it to hoard stock in times of a global oversupply.
The West African nation’s cocoa regulator has presented an industry plan to lenders as it also looks to expand warehousing capacity and pollinate cocoa trees, Bloomberg reported on Wednesday. Ghana Cocoa Board (Cocobod) has not said anything regarding this development. Reports say Noah Amenyah, a spokesman for the regulator, declined to comment when visited in his office.
According to a document seen by Bloomberg, Ghana plans to distribute the $600 million in finance as follows to various projects: domestic processing ($200 million); replanting of diseased tress ($140 million); rehabilitation of neglected farms ($83 million); hand pollination of trees ($68 million); new warehouse capacity ($50 million); farm irrigation ($41 million); farmer database ($11 million) and promoting cocoa consumption ($7 million).
The regulator has been considering several options of finance, following its decision to halt plans on cutting the rate it pays to farmers despite global drop in prices for beans to more than a third in 2017.
Ghana follows Ivory Coast as the second largest cocoa exporter in Africa and in the world. In March, both countries’ cocoa regulators presented industry plans to the African Development Bank (AFDB) and other lenders during meetings in Ghana’s capital, Accra. Loans consideration for as long as five years was the response Ghana Cocoa Board got in place of its request for a 10-year facility, according to sources that asked not to be identified.
Cocobod is also looking to conclude a deal in the third quarter, though the finance is asides the annual syndicated facility that Ghana obtains to settle farmers, the unauthorized sources noted. So far, the board has sold 1.7 billion cedis ($384 million) of 1-year and 182-day securities from January-March 2018. The regulator is also selling debt on the local market to cover its expenses.
Cocoa is the chief agricultural export of Ghana and the country’s main cash crop. The production occurs in the country’s forested areas: Ashanti Region, Brong-Ahafo Region, Central Region, Eastern Region, Western Region, and Volta Region. The livelihood of at least six million people (25 – 30 percent of the population) depends on the cocoa sector.