In order to serve retail consumers who might not want a rollover of their cocoa bills, the Ghana Cocoa Board (COCOBOD), the Bank of Ghana, and the commercial banks have reached an agreement that permits banks to utilise COCOBOD's deposits/placements with the banks.
This comes after the BoG first instructed banks not to reimburse consumers for their maturing cocoa bills investments due to COCOBOD's cash flow issues.
The Central Bank stated in a statement that it anticipates the short-term cash flow issues COCOBOD is now experiencing would be resolved quickly to allow the cocoa regulator to fulfil its investment responsibilities.
"COCOBOD has reassured us that the forecast for the 2023 crop season is favourable and that cocoa purchases are higher than they were in the previous year. In order for Cocoa Board to fulfil its responsibilities to investors, we anticipate that the short-term cash flow issues it is now facing will be rectified soon.
A six-month Cocoa bill maturing on January 19, 2023, with a face value of 940.42 million.
According to the Central Bank, "BoG went through the customary procedures to reissue on behalf of COCOBOD a new six-month Cocoa bill in order to raise funds to cover the maturing obligation, but regrettably, the auction failed and was severely undersubscribed, resulting in a shortfall of $855.42 million."
"All institutional investors would roll over their maturing cocoa bills for Tender 6155, it was decided in a meeting on Friday, January 20, 2023, between the banks, COCOBOD, and Bank of Ghana. Financial Institutions have consented to roll over their investments in cocoa bills, the statement said.
"Cocoa banknotes, like the Bank of Ghana bills, were meant as instruments to be held only by financial institutions," it was further said. The Bank of Ghana has regrettably learned that some financial institutions offered their products to retail customers.
The Bank of Ghana, COCOBOD, and the commercial banks have agreed to let banks utilise COCOBOD's deposits/placements held at the Central Bank of Ghana in order to lessen the cash flow issues faced by retail holders of cocoa bills.
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