Ghana’s cocoa marketing board, COCOBOD has recorded a profit of 2.3 billion Ghana cedis ($150 million) in the 2022/2023 planting season.
According to reports from the Ghanaian auditor general, the profit posted in the planting season marks the end of a six-year losing streak. The profit was occasioned by the restructuring of cocoa bills worth about 7.9 billion Ghana Cedis ($511 million) in 2023.
In 2023, COCOBOD initiated a debt securities exchange program aimed at restructuring its cocoa bills. As part of this initiative, the board extended an invitation to holders of its short-term debt securities, known as Cocoa Bills, to voluntarily exchange them for longer-term debt securities, which feature generally lower coupon rates.
According COCOBOD, holders of the Cocoa Bills whose offers were accepted received five new bonds, set to mature in 2024, 2025, 2026, 2027, and 2028. These new bonds carry a coupon rate of 12.5%.
Speaking on the profits recorded in 2023, the CEO of COCOBOD, Joseph Boahen Aidoo highlighted the debt exchange as a major boost to profitability.
He noted, “before the restructuring, we were paying interest of around 30 per cent. However, with the restructuring, the coupon rates have reduced to 12.5%.”
Rising global prices of cocoa
A significant contributor to profitability was increased revenue, as a report from Ghana’s Auditor General noted that there was a 41.7% increase in COCOBOD’s revenue to 17.7 Ghana cedis ($1.2 billion) in the planting season.
Cocoa prices have been rising since 2023, currently trading above $10,000 per tonne. The spike in cocoa prices have been linked to a poor output from two of the world’s largest suppliers, Ghana and Cote D’Ivoire. These two countries are responsible for 60% of the world’s cocoa supply.
Nigeria is also one of the world’s largest suppliers of cocoa to the global market, consistently appearing amongst the world’s top five producers.
In 2023, Nigeria’s export of cocoa products hit N391.5 billion, marking a 58% increase from the N248 billion recorded in 2022. With global prices almost tripling in 2024, Nigeria is projected to earn almost a N1 trillion naira from cocoa.
Ghana’s debt restructuring programme
The debt rework programme by Cocobod has been part of efforts by the Ghanaian government to restructure its debt as part of conditions to implement its $3 billion IMF programme.
This year, the Ghanaian government has been able to negotiate a debt exchange programme with its $13 billion Eurobond holders. The debt exchange, similar to the local debt exchange program conducted by Ghana in 2022, is expected to result in a 37% principal haircut for bondholders and could provide the country with debt relief of up to $4.7 billion.
The country has also formalized a deal with its official creditors’ committee to rework its $5.1 billion debt with bilateral lenders. Ghana is looking to get a $2.8 billion debt relief from its official creditors.
