NDC chops GH¢103m cocoa cash – Stabilisation account empty

• Posted on June 23, 2017
• by Nana Kwesi Coomson
• Comment

Contrary to the suggestion by the National Democratic Congress (NDC) that Stabilization Fund of the Ghana Cocoa Board (COCOBOD) should be used to cushion cocoa farmers following drop in world prices, the fund has already been emptied by the previous NDC administration led by former President John Dramani Mahama.

Sources at COCOBOD said per the 2016 syndicated loan contracted for the cocoa purchase in that year, about GH¢103 million was to go into the Stabilisation Fund.

However, nothing was left in the Cocoa Stabilization Fund except huge debt in the country’s cocoa sector.

The paper gathered COCOBOD was indebted to road contractors, fertilizers suppliers, raising questions about the use of the $2 billion loan.

This was after Dr Stephen Opuni, Cocobod’s former Chief Executive Officer (CEO), led the company to contract a syndicated loan of $2 billion from international banks to buy cocoa beans for the 2016/2017 crop season.

The Stabilization Fund portion of the loan was GH¢93,500,000 with interest amounting to GH¢103,311,794.52 and supposed to help cushion cocoa farmers from global cocoa price drop shocks this year.

However, the NDC Minority has advocated the Stabilization Fund should be used to increase the producer price since cocoa prices at the world market have dropped significantly.

The NDC administration was indebted to fertilizer suppliers to the tune of over GH¢500 million while contractors working on cocoa roads are owed GH¢3.5billion.

No payment was made to the contractors, bequeathing the huge debt to the current administration at the COCOBOD headed by Joseph Boahen Aidoo.

It is not surprising that the Economic and Organised Crime Office (EOCO) is probing the previous Opuni administration over massive corruption at the board.

In spite of this development, the Minority in Parliament on Wednesday held a press conference to accuse the current administration of not trying to be fair to cocoa farmers owing to its decision to maintain the producer price of cocoa at GH¢7,600 per tonne, despite the drop in prices on the international market.

Last year, the price of a tonne of cocoa beans was $3000 on the international market.

Eric Opoku, Minority spokesperson on Agriculture and Cocoa Affairs, who addressed the media, said the erstwhile Mahama administration established a Cocoa Stabilization Fund with annual contributions “as a risk mitigation mechanism against declines in international cocoa prices.”

He added that the “primary objective of the Stabilization Fund was to apply it to sustain the earnings of cocoa farmers and to cushion them, should the market price begin to decline.”

He teased: “The recent decline in the price of cocoa internationally must therefore trigger the use of the Stabilization Fund to put smiles on the faces of our farmers.”

Eric Opoku, who is also the Member of Parliament for the Asunafo South Constituency, further challenged government to make public the amount that has accumulated so far under the Cocoa Stabilization Fund.

The Minority is also seeking to create the impression that cocoa farmers would be rendered poor if steps were not taken to overturn government’s decision.

It has turned out that the NDC depleted the $2billion loan contracted for cocoa purchase.

But the Nana Akufo-Addo administration has since been able to raise about GH¢300 million from local purchases effected through the Cocoa Marketing Company (CMC) this year.

The money may not be enough for cocoa farmers in the country following the heavy debt bequeathed the present administration.

The price of a tonne of cocoa beans has now dropped by between $1,800 and $1,900 per tonne, a shortfall of $1100.

Despite this situation, COCOBOD intends to purchase 850,000 tonnes of cocoa beans this year.

Government has also explained that it would be suicidal to raise the producer price per tonne of cocoa beans purchased from farmers, particularly since prices have fallen.

“It is, therefore, not out of place for COCOBOD to take similar measures in the 2017/18 crop season to avoid a total collapse of the cocoa sector and to sustain cocoa farmer’s interest in the industry,” the Board noted.

By Samuel Boadi