The payment of matured investments in cocoa bills by the government has fallen behind schedule.
On January 19, 2023, the six-month Cocoa bill with a face value of 940.42 million was due, but the BoG admitted defaulting, explaining that despite following the customary procedures to reissue on behalf of COCOBOD in order to raise money to cover the maturing obligation, the auction sadly failed and was “severely undersubscribed resulting in a shortfall of GH855.42million.”
According to reports, the government renewed the matured interests without the investors’ permission, with the banks being told to carry out the renewal.
However, the Bank of Ghana (BoG) emphasized in a statement that retail customers who were not interested in a rollover of their cocoa bills would still be paid using COCOBOD’s bank deposits.
Following the default on the cocoa bills, an agreement was reached between the Bank of Ghana, the Ghana Cocoa Board, and the commercial banks.
According to a statement from 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 to retail customers who may not want a rollover of their cocoa bills in order to reduce the cash flow challenges on retail holders of cocoa bills.”
But in a statement, the Bank of Ghana (BoG) stressed that, retail customers not interested in a rollover of their cocoa bills would however be paid using COCOBOD’s deposits at the banks.
This is the agreement reached among the Bank of Ghana, Ghana Cocoa Board and the commercial banks following the cocoa bills default.
“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 rollover of their cocoa bills”, the Bank of Ghana said in a statement.
“It 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”, it further mentioned.
Read the statement below:
