The Head of Public Affairs at the Ghana Cocoa Board (COCOBOD), Fiifi Boafo, has explained the rationale behind the restructuring of its short-term securities (cocoa bills).
According to him, the interest rates on the loans had skyrocketed therefore the need to exchange the bonds for new ones.
He said that interest rates of 15% had increased to about 32%
Therefore, the IMF instructed that they restructure them.
“What happened was we went in for cocoa bills and the interest rate was around 15%. So yes, we were able to manage it, and then in a situation where we were unable to pay at a point, we roll over these cocoa bills. However, with the general economic situation in the country, the interest rate ballooned to about 32%.
“…Indeed, when this happened, COCOBOD took the decision to use bonds outside the country to retire all the cocoa bills. And by retiring them, it gave us the space to operate comfortably and take care of all our responsibilities…Then the IMF came in and as part of the discussions, they felt that COCOBOD is part of government so eventually if COCOBOD is not able to pay [its debt] then it will fall back on government. So there is the need for them to restructure this arrangement hence the cocoa bills becoming part of the debt exchange,” he was quoted by citinewsroom.com.
SSD/NOQ
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