The Bank of Ghana (BoG) says it has reached an agreement with the Ghana Cocoa Board (COCOBOD) and the commercial banks to allow banks to use COCOBOD’s deposits or placements at the banks to cater for retail customers who may not want a rollover of their cocoa bills.
The BoG in a press release issued on Monday January 23, 2023 said “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.”
Reacting to recent reports that government had rolled over maturing cocoa bills without the consent of investor, the BoG explained that “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 had agreed to roll over their cocoa bills investments.”
The release further pointed out that 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,” the BoG statement said.
The BoG recalled that on Thursday, January 19, 2023, a six-month Cocoa bill with face value of GH¢940.42 million matured.
The statement said “Bank of Ghana 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.”
According to the regulator, “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 short-term cash flow challenges facing Cocoa Board will be resolved soon to enable Cocobod meet its obligations to investors.”