Cocoa Exchange Programme witness massive participation rate

Dr. Mohammed Amin Adam, the Minister of State at the Ministry of Finance, has disclosed that the Government of Ghana’s cocoa bill exchange programme has achieved significant success, with more than 90% of Cocoa Bill holders tendering for exchange under the new initiative.

According to him, the success of the cocoa bill exchange programme is a major achievement for the state. He thus, hailed the accomplishment, noting that the proceeds from the endeavour are earmarked to fund upcoming cocoa purchases.

“We have achieved successful payments for bondholders through the new exchange and have concurrently received an outstanding response in the tendering process, with over 90% participation for cocoa bills totaling GH¢7.9 billion and a dollar exchange equivalent of $809 million. Detailed announcements will follow upon completion of settlements” he said.

The government’s announcement involves the exchange of nearly GH¢8.0 billion to refinance cocoa purchases for the upcoming season, as COCOBOD (Ghana Cocoa Board) seeks additional funds.

Last month, the government of Ghana thorough the Ghana Cocoa Board (COCOBOD) launched a debt securities exchange programme (the Cocoa Bill Exchange Programme) under which it invited holders of its short-term debt securities (the Cocoa Bills) to voluntarily offer to exchange their Cocoa Bills for longer- term debt securities with averagely lower coupon rates to be issued by COCOBOD (the Bonds).

Holders of the Cocoa Bills whose offers are accepted by COCOBOD will receive five (5) different Bonds with an aggregate principal amount (rounded down to the nearest GHS 1.00) equal to the principal amount of Cocoa Bills tendered (in addition to any accrued and unpaid interest due on such Cocoa Bills).

The five (5) Bonds will mature on a one-per-year basis consecutively from (and including) 2024 to (and including) 2028. The reasons for undertaking the Exchange Programme have been explained by the chief executive of COCOBOD in a letter dated 11th July 2023 from the chief executive to all holders of the Cocoa Bills.

Appreciation

Meanwhile, the Government has expressed its appreciation to all stakeholders, especially bondholders who voluntarily responded to the national call and participated in the Domestic Debt Exchange Programme (DDEP).

Under the terms and conditions of the DDEP, which was launched on 5th December, 2022, to complement Government’s fiscal programme, the first coupons of the tendered bonds were due on 22nd August, 2023.

Accordingly, on Tuesday, 22nd August, 2023, Government honoured its commitment and fully settled the first coupon due from the DDEP, in the amount of GH¢ 2,369,667,190.18 (approximately 2.4 billion Ghana Cedis).

The Finance Ministry in a statement iterated the government’s commitment to honouring all future payment obligations, in accordance with the terms of the new arrangements. The New Bonds issued, now stand as the dominant instruments in the domestic bond market, laying the basis for a rapid recovery.

Government further re-affirmed its commitment to the success of the New Bonds and a credible and strong domestic securities trading market.

The Ministry of Finance said it appreciates the sacrifices, forbearance and partnership of all Ghanaians, in helping the government to lead the nation to turn the corner towards restoring macroeconomic stability and inclusive growth.