The African Development Bank (AfDB), Credit Suisse AG, the Industrial and Commercial Bank of China Limited and Ghana Cocoa Board (COCOBOD) signed a US$600mn syndicated receivables-backed term loan to boost cocoa productivity in Ghana
Ghanaian President Nana Addo Dankwa Akufo-Addo, the President of the African Development Bank Dr Akinwumi A. Adesina, senior officials from Credit Suisse and ICBC, oversaw the signing of the facility, at a ceremony held on the second day of the 2019 Africa Investment Forum.
The multi-million dollar agreement is a milestone for the Bank-convened Africa Investment Forum, a transactional platform dedicated to transforming the continent’s investment and development agenda, which kicked off in Sandton City Johannesburg on Monday.
The COCOBOD transaction was launched at the Africa Investment Forum in 2018, and a year later, the signing is a demonstration of the Forum’s ability to raise financing, including from international commercial financiers, for projects in Africa. Prior to the agreement, COCOBOD did not have access to long-term debt capital.
At a press conference following the signing, President Akufo-Addo said, “It was critical that we find a mechanism for scaling up the value chain for our farmers and that is where the Bank came in.”
Making sure that Africa gets to the top of the value chain is one of the African Development’s Bank’s top priorities, President Adesina said, adding that Africa could become a global hub for cocoa and cocoa-based products.
“All cocoa-producing countries will get similar support (from the Bank). Ghana is bankable, cocoa is bankable and of course Africa is bankable,” Adesina said.
COCOBOD will use the facility to raise cocoa yields per ha 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.
The Africa Investment Forum, an initiative of the African Development Bank is an innovative, multi-stakeholder transactional marketplace, dedicated to raising capital, advancing projects to the bankable stage, and accelerating financial closure of deals.
Ghana’s cocoa sector employs around 800,000 rural families and produces crops worth US$2bn 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.