The Ghanaian parliament has approved a $2 billion loan facility for the Ghana Cocoa Board (Cocobod) to finance cocoa beans purchases for the 2016/17 crop season, amidst protest against previous expenditure patterns.
The re-export syndicated loan, which will enable Cocobod to buy around 900,000 metric tonnes of cocoa beans was passed Wednesday amidst intense debates after opposition legislators raised a red flag over high costs of the credit facility.
They questioned a $35.7 million cost allocated for arrangement and participation fees, labour and commitment fees including several cost components.
The legislators also expressed dissatisfaction over $570 million allocated for roads construction, which did not detail the length of the roads the amount sought to cover.
Despite the disputes, approval of the facility paves way for Cocobod to procure the $2 billion loan from a consortium of banks and financial institutions comprising local and international financiers.
The 275-member legislative body also approved a waiver of $10 million for stamp duty on receivables.
In the last crop season, an amount of $1.8 billion was approved and raised by the board for purchases of some 850,000 metric tonnes of the beans.
That loan attracted an interest of $4.1 million from October 2015 to January 2016.
The Cocobod was established in 1947 to encourage and facilitate the production, processing and marketing of good quality cocoa beans, coffee and sheanut in cost effective manner.
But some opposition members on Wednesday were concerned about how the loan proceeds were being applied with legal fees among others expenditure of $169,000, while $20,000 was spent on renting a venue for a signing ceremony.
Minority Spokesperson on cocoa affairs, Afriyie Osei Akoto said the amount requested by Cocobod for 2016 was too high given that several local farmers still did not have access to inputs such as fertilisers that are usually smuggled to neighbouring countries.
“To put it into context, the whole ministry of Food and Agriculture, their budget in this house is not even $500 million, so what we are saying is that these expenditures are so huge,” he said.
“This is twice the allocation to the whole ministry, so we need to interrogate these figures to make sure that we have value for money, there are always these constant reports of smuggling of Ghana’s cocoa and fertilisers across the borders and within Ghana.”
