Cocobod says paid back $1.7 billion cocoa loan

September 2, 2015 7:04 AM

Amenyah said Cocobod expects the syndication to be oversubscribed as a mark of renewed confidence in the company for fully retiring last year's debt, despite the bad harvest.

A man carries a cocoa bag while walking over cocoa beans left out to dry in Niable, at the border between Ivory Coast and Ghana, June 19, 2014. Picture taken June 19, 2014. REUTERS/Thierry Gouegnon

Ghana'sCocobod has paid back a $1.7 billion loan it received from international lenders last year, its spokesman said on Tuesday, putting to rest fears of default by the regulator due to this year's dismal harvest.

Noah Amenyah, head of public affairs, said Cocobod retired the loan before the deadline last week.

Ghana, the world's second-largest cocoa producer after Ivory Coast, is experiencing a poor cocoa harvest this year with output down 23 percent over last year due to harsh weather and poor agronomic practices.

The production shortfall sparked fears among investors that the regulator would default on the loan.

"I am happy to say that we paid up the last tranche (of the loan) including all interest charges last week. All the banks are satisfied," Amenyah said.

Ghana's cocoa purchases only hit the 700,000 tonne-mark last week and it has become clear that the country will miss its revised 750,000 tonne-target as the crop year draws to a close this month.

Cocobod is set to sign a new syndicated loan of $1.8 billion from international lenders on Sept. 17 in Paris for the 2015/16 crop purchases, estimated to yield around 900,000 tonnes.

The central bank is also hoping to use the hard currency inflows from the syndication to boost its reserves in support of the local currency which is currently down more than 20 percent this year.

Ghana, which also exports gold and oil, is currently under a three-year aid programme with the International Monetary Fund to fix its economy, dogged by deficits, public debt and high interest rates.

The country is also grappling with a prolonged power crisis resulting in frequent blackouts that have crippled industries and angered voters ahead of elections next year.