Cabinet Orders Forensic Audits, Criminal Investigation into COCOBOD

The Cabinet has ordered a forensic audit and a criminal investigation into the activities of COCOBOD over the last eight years.

According to the Minister for Finance, Casiel Ato Forson, the move is aimed at ensuring accountability and transparency in the management of COCOBOD and the cocoa sector as a whole.

It comes after a preliminary review flagged the sector for mismanagement, he said.

COCOBOD currently owes the Ministry of Finance GH¢3.7 billion and the Bank of Ghana a 10-year loan of GH¢1.38 billion.

The debt to the Ministry of Finance is reported to have arisen from the conversion of the non-marketable cocoa bills into a loan.

“A careful review of the cocoa sector over the last eight years revealed gross mismanagement, which requires immediate and comprehensive reforms to address the challenges in the sector.”

Meanwhile, the government has announced a new financing model after the country delayed payment to cocoa farmers due to the current model which has been described as ineffective.
The current model takes its root from the deterioration of COCOBOD’s finances in 2022, which resulted in a default and restructuring of the Cocoa Bills in 2023, he explained.

“For the first time, in 2023, the annual syndication suffered significant delays due to loss of confidence in the Ghanaian economy. The first tranche was received on 22nd December 2023, four months after the commencement of the season. COCOBOD projected an output of 800,000 tonnes, and committed 786,672 tonnes in contracts in the 2023/24 crop season. However, actual production was 432,145 tonnes, a deviation of 45% from the projected output.

“Variations in crop forecasts typically vary between 5% to 15%. Hence, a deviation of 45% was unprecedented. This resulted in huge rollover contracts of 333,767 tonnes at an average price of US$2,661 per tonne.”

This resulted in over US$1 billion loss that year and continued into 2024, where COCOBOD could not pay the final tranche of the syndicated loan due in July 2024.

According to him, the Finance Ministry intervened with a US$70 million bridge financing to avert a default.

The amount was, however, not paid by COCOBOD.

Story by Hajara Fuseini

Click to read more: https://opemsuo.com/author/hajara-fuseini/