The Herald's investigation into the problems at the Ghana Cocoa Board (COCOBOD) has uncovered a further alarming development that the country's cash cow; the cocoa sector is in a terrible state with 73 of its containers filled with agrochemicals and implements being stranded at the port of Tema for almost a year and a half or longer.
The majority of the agrochemicals, with a total value of hundreds of millions of dollars in the United States, have expiration dates and have the potential to be deemed unfit.
According to the facts presented in the publication, this is as a result of the surprising decision made by the government to revoke the tax privileges that COCOBOD had enjoyed over the years. The government insisted that the institution pay import duty on all of its imports into the country, just like it is the case with private businesses.
The Ghana Revenue Authority (GRA) and other institutions operating in the Tema Port are reportedly expecting to receive a payment from COCOBOD in the amount of GH3.9 billion before they will allow 73 containers containing agrochemicals, jute sacks, and other farm implements to leave the port and be distributed to farmers. This information was provided to The Herald by individuals with knowledge of the situation.
Prior to the election of the Akufo-Addo administration, these locked agricultural supplies, such as fertilisers, were traditionally distributed for free to cocoa growers as part of various intervention programmes.
The government's attempts to sell the essential cocoa inputs to the farmers at subsidised prices were unsuccessful, so it decided to pursue a policy of full cost recovery instead. Despite the fact that this has a negative impact on productivity in terms of yields, the administration does not appear concerned.
Many people are concerned that the current rate of development may result in ineffective agricultural practises in the fight against diseases and pests.As a consequence, cocoa yields will be poor, which will lead to a reduction in revenue for the Ghanaian economy, which is virtually clinging to life despite the fact that many suppliers are seeking payment for the goods and services they have given.
The Ministry of Finance was successful in convincing Parliament to remove the tax exemption that was granted to the country's most lucrative industry, which resulted in the imposition of the enormous import tariff of GH3.9 billion.
In addition to the staggering amount of GH3.9 billion, The Herald has been informed that COCOBOD's chosen clearing agency will be required to collect a whopping amount of GH38 million in additional charges.
The management of COCOBOD rushed to Parliament in order to have the new directive rescinded and the tax exemption reversed, according to the information that was provided to The Herald. This information comes as a result of the unsettling state of events.
It is reported that the House has changed its mind about the decision, but it is unclear when management will write to the Finance Ministry or GRA to request authorization to have the GH3.9 billion import duty waived so that the products can be cleared customs and sold to the farmers who have been complaining about how unprofitable cocoa farming has become.
The news website Bloomberg published an article in May of this year stating that the International Monetary Fund (IMF) is supporting projects that the Akufo-Addo government is implementing in order to reduce COCOBOD's losses.
The COCOBOD initiatives that Ghana is now using need to be phased out. The International Monetary Fund was confident that the Ghanaian government would consent to the restructuring before the time of the first review.
As part of an economic reform programme endorsed by the IMF for the three-year, $3 billion IMF bailout, the world's second-largest cocoa producer will be required to reduce the losses suffered by the industry regulator that oversees its business.
The initial payment, which is approximately $600 million, has already been sent. In order for the Ghanaian government to be eligible for further payments, it will first need to accomplish certain targets aimed at reestablishing economic stability and lowering the weight of the country's debt in advance of annual IMF reviews.
In point of fact, it was just a week ago when it was reported that COCOBOD was in the midst of significant financial difficulties. As a result, the organisation was compelled to extend an invitation to holders of its short-term debt securities (cocoa bills) to exchange those for longer-term debt securities.
The exchange plan that is now being carried out by COCOBOD also features a principal maturity date that is set for a longer period of time. However, taking part in this invitation to have a conversation is completely voluntary.
In spite of the fact that eligible holders were invited to trade in their bills for new bonds, COCOBOD retains the right to settle eligible bills in full or in part at its sole discretion. Additionally, eligible holders are not required to subscribe for new bonds; doing so is entirely voluntary.
This comes at a time when it has been reported that the administration of COCOBOD is mostly unable to pay for services that have been delivered to it, and its imports are also believed to be blocked at the ports due to import duties.
According to additional sources, the COCOBOD already has an excessive number of employees. More than 10,000 people are employed there, and a significant number of them are supporters of the ruling party who just stand around doing nothing. They were hired more for the sake of political expediency than because of the availability of open positions, their skills, or their qualifications.
It has come to light that throughout the period from 2017 to 2022, when COCOBOD was transferred under the supervision of the Ministry of Food and Agriculture by the Akufo-Addo government, the organisation has racked up a string of losses, and its accumulated debt is estimated to be somewhere about GH16 billion.
On Thursday of last week, the Minister of Finance, Ken Ofori-Atta, was pressured into announcing a plan to restructure the country's debt.
COCOBOD is providing Eligible Holders with the opportunity to receive accrued and unpaid interest (referred to as "Accrued Interest Payable") on their Eligible Bills that have been lawfully tendered and accepted by the COCOB.
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