We won’t use Syndicated Loans to construct Roads in Cocoa growing areas anymore – Govt

314 total views, 4 views today

Visit: www.glorynewsonline.com for Gospel Happenings

The government says it will no longer use the annual Cocoa syndicated loans to construct roads in Cocoa growing areas in the country. This is despite calls by Members of Parliament (MPs) to the government to pay some attention to deplorable roads in cocoa growing areas in the country.

The Member of Parliament for the Bia East Constituency, Richard Achampong, earlier raised the concerns about the deplorable nature of some Cocoa roads in the Northern part of the Western Region during his contributions to a motion on the Floor of Parliament for a syndicated loan for the purchase of cocoa beans. He later met members of the Parliamentary Press Corps to reiterate his concerns.

He was concerned that the continuous neglect of these roads which he considers to be very critical for the sustenance of the interest of Cocoa farmers in growing cocoa, may be costly for the nation in the long term in terms of economic and development, as well as political.

In his view, government’s decision to halt contracts that have already been awarded by the previous government on these roads for political reasons, will have adverse economic implications on the contractors and the general economy since the cost of constructing the roads are likely to go up after some time, as well as retard the development of these areas.

Addressing the Parliamentary Press Corps outside the House of Chamber after the House had approved a 1.3 Billion Dollars for the purchase of Cocoa in Ghana for the 2018/2019 crop season, Mr. Richard Acheampong mentioned the following roads as deserving immediate attention: Bencheman junction to Osei-Kwadwo Krom; Adabo Krom to Nkran Nkwanta; and Adabo Krom to Kodwo-Armah.

The loan facility which was approved by Parliament on Wednesday, July 25, 2018, is a Receivables-Backed Trade Finance Facility between Ghana Cocoa Board and a consortium of Banks and Financial Institutions, with the government of the Ghana as guarantor, for the purchase of cocoa in Ghana for the 2018/2019 crop season.

According to him, the previous Administration always imputed a formula into the arrangement of the Cocoa syndicated loans which allowed some allocation to be made for the construction of some vital roads which facilitate the carting of the Cocoa beans from the farm gates to the point of sale and then for onward transmission to the ports for export.

However, the new administration of the Cocoa industry under the new government led by President Akuffo Addo, is determined to end the practice because it did not give value for money and does not augur well for the prudent management of the fund meant for the sole purchase of Cocoa beans for a particular crop season.

Addressing the same Parliamentary Press Corps immediately after the intervention of the MP for Bia East, the Manager of the Office of the Chief Executive Officer of the Ghana Cocoa Board (COCOBOD), Fiifi Boafo, indicated that the new administration does not think that the syndicated loan which is a short term facility should be the source of funding for roads.

He explained that the Cocoa syndicated loan is for a specific purpose to purchase cocoa beans from farmers for a particular cropping season, based on which the facility is procured from the bank. He added that any attachment in the long term that may endanger the repayment of the loan facility after the stipulated repayment period should not be countenanced.

According to him, the practice of using part of the funds to construct roads over the years base on wrong projections in cocoa purchases in order to attract more funds, led to a situation where set targets were missed on two occasions.  A situation which he noted, did not augur well for future prospects of raising funds for the cocoa enterprise.

Fiifi Boafo further noted that the situation has also led to the institution being saddled with a 5.1 Billion Cedis debt dating as far back as 2015 which the institution is struggling to offset.

He however observed that, government is finding alternative means to fund the road projects in these cocoa growing areas which they may consider to be critical.

Source: Clement Akoloh || afriwakeradio.com

Ghana News Online

The primary function of GhanaNewsOnline.com.gh is to gather, process and distribute news about Ghana and Africa to the World. To serve as a News Agency with the mandate to present complete, in-depth objective and impartial information, news, and features rooted in investigative journalism.

Leave a Reply

Your email address will not be published. Required fields are marked *