Ghana is seeking a $1.5 billion loan from Export-Import Bank of China (EXIM) for its Cocoa Board (Cocobod), so the institution can improve farms and install irrigation systems and other projects.
According to the chief executive of the government-controlled institution that fixes the buying price, Joseph Aidoo, “We have been in discussions since last year to secure $1.5 billion to finance our plans, mainly to replant diseased and aged trees, build warehouses and cocoa roads to improve farmers’ income, and also to provide irrigation’s in the face of changing climate conditions.”
In addition, to the loan, China will also grant the West African country $35 million to help build a 40,000-tonne state-run cocoa processing plant. The new processing plant, which is estimated to cost a total of$60 million, will be built in the western region of Sefwi-Wiawso as part of a wider plan to double locally-processed cocoa production. Aidoo stated.
In 2017, Ghana’s Cocoa board was also in talks with China’s EXIM bank to secure a $500 million loan to overhaul the sector and protect against global price volatility. Officials noted that that “the whole idea of going to China was to source for funding for capital projects of medium to long-term. We need to adopt a new marketing system that will insulate us from price instability.”
Ghana is the world’s second largest cocoa exporter after Ivory Coast and produces an average 800,000 tonnes of beans per year, with plans to reach 1 million tonnes by 2020. The country currently only processes about 250,000 tonnes.
Ghana will pay back the loan over five years, including an initial two-year grace period. Though it is unsure if the $1.5 billion would be included in the five years.