Ghana Cocoa Board has assured the Bank of Ghana that the outlook for the 2023 crop season is good, and Cocoa purchasing is ahead of last year.
In a statement in reaction to the default of cocoa bills by COCOBOD, the Bank of Ghana said it expects the short-term cash flow challenges facing COCOBOD to be resolved soon to enable it to meet its obligations to investors.
The statement further said the Bank of Ghana, COCOBOD and the commercial banks have agreed to allow banks to use COCOBOD’s deposits/placements at the banks to cater for retail customers who may not want a rollover of their cocoa bills.
“COCOBOD has assured us that the outlook for the 2023 crop season is good, and Cocoa purchasing are ahead of last year. We therefore expect that this short-term cash flow challenges facing Cocoa Board will be resolved soon to enable COCOBOD to meet its obligations to investors.”
On Thursday, January 19, 2023, a six-month Cocoa bill with face value of ¢940.42 million matured.
The Central Bank said “BoG went through the usual processes to reissue on behalf of COCOBOD a new six-month Cocoa bill to raise funds to cover the maturing obligation, but unfortunately, the auction failed and was severely undersubscribed resulting in a shortfall of¢ 855.42million”.
“At a meeting held on Friday, 20th January 2023 among the banks, COCOBOD and Bank of Ghana, it was agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155. Financial Institutions have agreed to roll over their cocoa bills investments”, it explained.
It added that “cocoa bills, like the Bank of Ghana bills, were designed as instruments to be held just by financial institutions. Unfortunately, it has come to the notice of the Bank of Ghana that some Financial Institutions sold their instruments to their retail clients.”
“To reduce the cash flow challenges on retail holders of cocoa bills, the Bank of Ghana, COCOBOD, and the commercial banks have agreed to allow banks to use COCOBOD’s deposits/placements held at the various banks to cater for retail customers who may not want a rollover of their cocoa bills,” it concluded.
Source: Business Analyst
Ghana | Atinkaonline.com