November 1, 2017 / 8:53 PM / 2 years ago

Ghana's Cocobod says clearing debts after wasteful spending

ACCRA, Nov 1 (Reuters) - Ghana’s cocobod has initiated reforms to clear its debts of up to 19.6 billion cedis ($4.45 bln) resulting from bloated contracts and wasteful expenditure by previous managers, the chief executive said on Wednesday.

Joseph Boahen Aidoo said on taking up his post in February that his administration had discovered that $400 million of a $1.8 billion loan signed by Cocobod with international lenders last year was withdrawn under unclear circumstances. Cocobod relies on syndicated loans from international lenders each year to finance beans purchases through the crop year which usually runs from October to September. It raised $1.8 billion in a similar transaction last year.

“Peculiar to the loan utilization is the last drawdown of $400 million which was effected on December 20, 2016 at the time the NDC (then ruling party) had woefully lost the December 2016 elections,” Aidoo told reporters in Accra.

Aidoo said the $1.8 billion which was signed based on the 2016-17 purchases target of 850,000 tonnes, had been fully utilized by January when only 587,125 metric tonnes of cocoa had been bought.

He said on several instances the previous government had siphoned monies from Cocobod account for expenses that were unrelated to the regulator’s operations. For example $25 million was used under the guise of export duty payments to settle judgment debt to a construction firm in January last year.

Cocobod’s top management is appointed by the president and the tenure of members ends when the government changes. Aidoo was appointed by President Nana Akufo-Addo, who took office in January and vowed to clean up the cocoa sector.

A former senior manager told Reuters he could not comment on the issue because members of the previous management team were under investigation.

Samson Ahi, a member of the NDC and a former housing minister, denied the charges and said all monies spent, especially from syndicated loans, were properly accounted for.

“The $400 million drawdown, for example, was used to pay contractors. It’s not as if the money was shared among NDC members,” he said. He also said an investigation was underway into members of the former management.

Despite the debts, Aidoo said Cocobod would not lower the price it paid its farmers although world prices had plummeted by about a third since last year.

Ghana, the world’s second largest cocoa producer, has kept farmgate prices at 7,600 cedis per tonne since last year, a level industry watchers say has encouraged smuggling from top grower Ivory Coast where farmers are receiving less. Cocobod said last month it was in talks with Export-Import Bank of China to secure a $500 million loan to overhaul the sector and protect against global price volatility.

$ = 4.4 Ghanaian cedis Reporting by Kwasi Kpodo; Editing by Edmund Blair

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