The Bank of Ghana has asked banks to pay individual investors of COCOBOD’s bill who do not want their matured investment to be rolled over.
COCOBOD’s deposits or placements held at the various banks would now be used to cater for retail customers who are not willing to roll over their matured cocoa bills.
The directive follows protest by investors who accused the various banks of rolling over their matured COCOBOD bills without their consent.
The banks had explained to customers that the unilateral action was based on a Bank of Ghana directive to them.
But a January 23 press release by the Bank of Ghana explained that the banks were asked to roll over because its processes to reissue a new six-month Cocoa bill to raise funds to pay maturing obligation were “severely undersubscribed”.
The Central bank noted that the face value of the cocoa bill is GH¢940.42 million but the failure of the new bill raised on behalf of COCOBOD resulted in a shortfall of GH¢855.42 million.
At a meeting held on Friday, 20th January 2023 among the banks, COCOBOD and Bank of Ghana, the statement said, it was agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155.
At the meeting, the financial institutions agreed to roll over their cocoa bills investments, Bank of Ghana claimed.
“Cocoa bills, like the Bank of Ghana bills, were designed as instruments to be held just by Financial Institutions. Unfortunately, it has come to the notice of the Bank of Ghana that some Financial Institutions sold their instruments to their retail clients.
“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 roll over of their cocoa bills.”
According to the Bank of Ghana, COCOBOD has assured it that the outlook for the 2023 crop season is good, and Cocoa purchasing are ahead of last year.
“We therefore expect that this short-term cash flow challenges facing COCOBOD Board will be resolved soon to enable COCOBOD meet its obligations to investors.”