Ghana Cocoa Board (Cocobod) has signed its longstanding annual pre-export financing (PXF) facility at US$1.095bn, down US$405mn from last year’s loan of US$1.5bn.

The 11-month receivables-backed syndicated loan has been agreed each year for the previous three decades and will be used to finance cocoa purchases for the upcoming 2022/23 season.

Cocobod launched the facility to the market on August 23 at an initial amount of US$1bn and upsized the facility to US$1.095bn following oversubscription.

The facility was originally reported to have closed at US$1.13bn. A spokesperson tells GTR that “the reason behind the different amount is that one lender was late and could not join at signing”.

“However, there is an accordion mechanism that could allow Ghana Cocoa Board to increase the size of the facility for any latecomers. Therefore, if this bank joins in the coming days, the facility could be increased to US$1.13bn.”

This year, Industrial and Commercial Bank of China’s London branch, MUFG, Natixis, Rabobank and Standard Chartered were the co-ordinating initial mandated lead arrangers (MLAs) for the facility, while Ghana International Bank was the initial MLA.

Bank of China’s London branch joined the facility as senior MLA, while the Arab Bank for Economic Development in Africa and DZ Bank joined as MLAs. Lead managers were the Ahli United Bank, Federated Hermes and OPEC Fund, and Ecobank joined as arranger.

United Bank for Africa is named as a lead manager in an announcement on Cocobod’s website but not in an official press release issued on behalf of Natixis and Cocobod. The spokesperson was unable to clarify if the bank had joined the facility.

According to Cocobod’s announcement, the facility “would attract an interest rate of 1.75%”.

Ghana has suffered an economic slowdown since the Covid-19 pandemic, resulting in currency depreciation and high inflation. In 2020, Cocobod chief executive Joseph Aidoo denied claims the organisation was struggling to attract banks to the loan due to pandemic uncertainty and a lack of competitive pricing.

Despite the year-on-year decrease in value, Ghana’s minister of finance Ken Ofori-Atta claims the newly signed facility strikes an optimistic note as the country battles economic crisis.

“There continues to be a great future for our country and I think this will ring around the globe and give impetus to our negotiations [with the International Monetary Fund],” Ofori-Atta said, speaking at the signing ceremony.

Peter Mac Manu, Cocobod’s chairman of the board of directors, adds: “I’m happy that it continues to have the confidence of the financiers because we have never defaulted, and we will not default.”

Governor of the Bank of Ghana Ernest Addison expresses hopes the facility will help stabilise the economy. “We are looking forward to being able to minimise the impact of the depreciation of the currency on the standard of living of Ghanaians, and this particular inflow helps very much in achieving that objective,” he notes in Cocobod’s announcement.