|Approval Date||27 Nov 2018|
|Signature Date||12 Nov 2019|
|Sovereign / Non-Sovereign||Non Sovereign|
|Sector||Agriculture and Rural Development|
|DAC Sector Code||31110|
The proposed operation is a 7-year, USD 600 million (USD150 million from the Bank, and USD 450 million from other financial institutions), receivable-backed, syndicated loan facility to Ghana Cocoa Board (COCOBOD) to finance key components of its Productivity Enhancement Programmes (PEPs). 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. The objective of the PEPs is to roll out a set of measures that will improve productivity per hectare and increase cocoa production levels well above 1 million tonnes per year (versus an average of 800,000 tonnes per year over the last ten years). The PEPs will mainly entail measures to sustainably increase plant fertility; develop irrigation systems; rehabilitate aged and disease-infected farms; increase warehouse capacity; and create an integrated farmer database. The programmes will also provide short-term working capital support to local cocoa-processing companies, thus facilitating domestic value addition and consumption of cocoa products in Ghana. This long-term investment would help to boost cocoa production through the rehabilitation of ageing plantations, finance new warehouses to store cocoa beans longer and boost the processing of cocoa beans. The Bank is expected to play two roles in this transaction; namely (i) acting as initial Mandated Lead Arranger (MLA) ; and (ii) providing up to a maximum amount of USD 150 million secured senior loan to catalyze the participation of commercial lenders, given their customary limited risk appetite for tenures longer than the one-and three-year facilities that they have been accustomed to providing to COCOBOD.
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, improving irrigation systems, rehabilitating aged and disease-infected farms. The funds will also help increase warehouse capacity and provide support to local cocoa-processing companies. Key development outcomes also include increase in sustainable farm productivity; effective disease control and management; agricultural transformation with domestic value-addition.
The operation is a mechanism for scaling up the cocoa value chain and will help to ensure higher incomes for Ghana’s cocoa farmers. It portends very strong gender and youth employment impacts as the cocoa sector employs mostly youth and women. The sector represents 8.2% of Ghana’s GDP, employs over 800,000 farmers, and supports the livelihood of around 4 million people and accounts for over 67% of household income. Farmers are guaranteed a minimum of 70% of the net world’s free-on-board (FOB) price of cocoa for their products.
African Development Bank
|Last Update||07 Aug 2020|