Cocobod seeks US$750m loan to replace overaged cocoa trees

The Ghana Cocoa Board (Cocobod) is seeking to raise an about-US$750million facility from a consortium of banks to help finance a massive cocoa rehabilitation programme, aimed at replacing more than half of the country’s overaged tree stock.

The US$750million loan facility will be raised from local and foreign banks, is expected to be completed early next year, and will be repaid with cocoa proceeds over a period of five years. 

Chief Executive Officer of the Board, Joseph Boahen Aidoo, in an interview said: “We want to cut down more than 400,000 hectares (988,431 acres) of trees, which are non-productive because they are either diseased or overaged. 

“We will cut nothing less than 45 percent of the total tree stock, but we will do it in phases over a period of between five to eight years.”

Mr. Aidoo explained that about 20 percent of the country’s cocoa trees have been affected by the Cocoa Swollen Shoot Disease, a virus which reduces yields and kills a plant within three to four years; while another 25 percent of tress are old and unproductive.

“The spread of the disease is disturbing and alarming, even young farms, which are just about to get to their peak production levels have been affected by the virus; and the sad part of this development is that there is nothing to be done about those tress than to hew them down, a development that will leave cocoa farmers very miserable.

“This is why we are seeking to raise this short-term facility, to finance our rehabilitation programme as well as incentivise farmers to cut the old and diseased trees and replant with the new high-yielding hybrid seedlings,” Aidoo said. 

He indicated that the US$750million facility will be in addition to an expected borrowing of US$600million from the African Development Bank for building warehouses and other measures to improve storage and distribution of the crop. 

Part of the loan will also be used in training more extension officers, who will work in the cocoa growing communities and help educate farmers on best agronomic practices that boost crop yields. 

The industry regulator is also seeking to improve yields and incomes for hundreds of thousands of small-holder farmers who dominate the industry in the country.