The Ghana Cocoa Board (COCOBOD) on Friday, January 20, defaulted on the payment of its 182-day bill, unilaterally rolling over GH¢940 million of debt.
This is the first time the Board has defaulted on its short-term obligations since the bills were introduced by the Bank of Ghana (BoG) in 2002.
In a statement dated January 23rd 2023, the Bank of Ghana sought to clarify the default and announce measures for the way forward.
Statement below…
- On Thursday, 19th January 2023, a six-month Cocoa bill with face value of GH¢940.42 million matured. Bank of Ghana(BOG) went through the usual processes to reissue on behalf of Cocobod a new six-month Cocoa bill to raise funds to cover the maturing obligation, but unfortunately, the auction failed and was severely undersubscribed resulting in a shortfall of GH¢ 855.42million
- At a meeting held on Friday, 20th January 2023 among the banks, Cocobod and Bank of Ghana, it was agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155. Financial Institutions have agreed to roll over their cocoa bills investments.
- Cocoa bills, like the Bank of Ghana bills, were designed as instruments to be held just by Financial Institutions. Unfortunately, it has come to the notice of the Bank of Ghana that some Financial Institutions sold their instruments to their retail clients. To reduce the cash flow challenges on retail holders of cocoa bills, the Bank of Ghana, Cocobod and the commercial banks have agreed to allow banks to use Cocobod’s deposits/placements held at the various banks to cater for retail customers who may not want a roll over of their cocoa bills.
- Cocobod has assured us that the outlook for the 2023 crop season is good, and Cocoa purchasing are ahead of last year. We therefore expect that this shortterm cash flow challenges facing Cocoa Board will be resolved soon to enable Cocobod meet its obligations to investors.
END
Press Release https://t.co/ZWR1EcJOUs pic.twitter.com/k9KK9Kbz44
— Bank of Ghana (@thebankofghana) January 23, 2023
Source: theGhanaianVoice.Com