September 28, 2020

JICA and other DFIs provide $600 million syndicated loan to COCOBOD

COCOBOD, Japan International Cooperation Agency, JICA and other Development Finance Institutions have announced a $600 million credit facility for COCOBOD’s Productivity Enhancement Programmes (PEPs).

The facility is part of a number of projects in line with the Ghana beyond Aid agenda.

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In November 2019, Development Finance Institutions (DFI) including African Development Bank (AfDB), Japan International Cooperation Agency (JICA), Development Bank of Southern Africa (DBSA) and Cassa Depositi e Prestiti Spa (CDP), and commercial finance agencies such as Credit Suisse AG(London Branch), the Industrial and Commercial Bank of China(London branch) and other International agencies, signed a $600 million syndicated receivables-backed loan facility with Ghana Cocoa Board (COCOBOD) to boost cocoa productivity in Ghana.

Speaking at the signing ceremony, Chief Executive Officer of COCOBOD, Mr Joseph Boahen Aidoo stated that the money will help COCOBOD to contribute to curtailing the challenges with productivity of the country’s cocoa production.

“As the second largest cocoa bean producing country in the world, Ghana fulfills a major part of supplying to the demand around the world. However, there are challenges with productivity of the country’s cocoa production, as well as with the systems in place for processing and the distribution of cocoa. By strengthening the cocoa bean-centric agricultural value chain and related industries, the finance will help COCOBOD to contribute to achieving SDG Goals 1 (no poverty), 8 (decent work and economic growth) and 12 (responsible consumption and production),” he said.

He also said that, “COCOBOD will use the facility to raise cocoa yields per hectare and increase Ghana’s overall production. These include financial interventions to sustainably increase cocoa plant fertility, improve irrigation systems, and rehabilitate aged and disease-infected farms. The funds will also help increase warehouse capacity and provide support to local cocoa-processing companies.”

The Chief Representative of JICA Ghana, Mr. Yasumichi ARAKI, also stated that, at the 7th Tokyo International Conference on African Development (TICAD7) in 2019, JICA and AfDB agreed to provide $3.5 billion in joint financing under the fourth phase of the Enhanced Private Sector Assistance for Africa Initiative (EPSA4).

“This loan marks the first time JICA and AfDB will be providing direct co-financing under EPSA4 as well as first non-sovereign project,” he said.

He further noted that JICA has cooperated with the Government of Ghana in various sectors since 1962. A firm relationship has been built for more than a half century. To mention a few examples, Noguchi Memorial Research Institute is one of the well-known projects by the people of Ghana. Also the Tema motorway interchange project, which was recently completed and has contributed to solve traffic congestion and accelerates economic activities in Ghana as well as neighboring countries.

Cooperation with COCOBOD begun in 2014, in which support was given to the capacity building of its quality control laboratory staff in advanced techniques for testing pesticide residue in cocoa beans. Cocoa is one of the most essential import commodities of Japan, and Ghana’s cocoa accounts for about 80% of all cocoa beans imported into Japan.

“It is JICA’s hope that this loan facility will assist COCOBOD to implement the Productivity Enhancement Programs (PEPs) more efficiently and sustainably to meet its expected goals. Also that there will be increased yield of cocoa as cocoa farmers benefit from this nationwide program. More importantly, apart from JICA’s $100 million contribution to this syndicated loan, it is also considering another technical cooperation to COCOBOD to support the success of PEPs implementation,” he added.

Ghana’s cocoa sector employs over 800,000 rural families and produces crops worth about $2 billion in foreign exchange annually. COCOBOD is a fully state-owned company solely responsible for Ghana’s cocoa industry, controlling the purchase, marketing and export of all cocoa beans produced in the country.

Source: Business