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In order to satisfy retail consumers who might not want a rollover of their cocoa bills, COCOBOD has been instructed to use its deposits/placements held at the various banks.
The Bank of Ghana (BoG) said in a statement on Monday that this is intended to lessen the cash flow difficulties faced by retail holders of cocoa bills.
Investors in the country have had yet another hit on their portfolios as COCOBOD on Thursday defaulted on the payment of matured Cocoa Bills as expected.
The 182-day cocoa bill, originally issued on 21st July, 2022 for the amount of GHS 940,420,531 matured Thursday, 19th January, 2023.
Sources however revealed that shortly after accounts were credited with their matured amount, these accounts were debited again without any explanation.
Further checks revealed that, these funds were unilaterally rolled over into a new 182-day cocoa bill with a new maturity date of 20th July, 2023 at a rate of 30.78% per annum lower than the current Treasury Bill rate of 35%.
However, BoG in a reaction to the development said:”On Thursday, 19th January 2023, a six-month Cocoa bill with face value of GH¢940.42 million matured. Bank of Ghana(BOG) 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.”
Following this, a meeting held on Friday, 20th January 2023 among the banks, COCOBOD and Bank of Ghana agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155.
BoG said it has come to the notice of the Central Bank that some Financial Institutions sold their instruments to their retail clients, against the usual practice.
“Cocoa bills, like the Bank of Ghana bills, were designed as instruments to be held just by Financial Institutions,” the BoG statement said.
Nonetheless, BoG reiterated “We therefore expect that this short-term cash flow challenges facing Cocoa Board will be resolved soon to enable COCOBOD meet its obligations to investors,” following the assurance from COCOBOD that the outlook for the 2023 crop season is good, and Cocoa purchasing are ahead of last year.
A source at COCOBOD admits the roll over of the matured cocoa bills was not a novel practice as it was an arrangement with the banks who accepted COCOBOD’s request to have the bills rolled over.
While the country is undergoing a domestic debt restructuring programme currently faced with a lot of push back by bondholders, it is unclear if this development is part of the debt restructuring programme.
