Joseph Aidoo Boahen, Chief Executive Officer of COCOBOD, has expressed hope that the establishment of the Development Bank Ghana (DBG) will help increase cocoa processing companies in the country.
According to him, the low-interest rates to be offered on loans by the DBG, is expected to serve as an incentive for persons willing to venture into cocoa processing and value addition activities.
Speaking to norvanreports on the sidelines of the Cocoa Value Chain Investment Meeting 2021 organised in partnership with the Ghana Investment Promotion Centre (GIPC) on Thursday, Mr Boahen averred, “DBG is going to reduce the cost of borrowing for businesses, once you get a loan facility and the interest is low, you can invest and get good returns and be able to pay the main loan back and get some margins as well.”
“For us at CCOCOBOD, we believe it is going to leverage the space for those who want to go into cocoa processing and add value to cocoa beans for exports,” he added.
Currently, there is only a handful of cocoa processing companies in Ghana with the notable ones being state-owned cocoa processing company, Tema Cocoa Processing Company (CPC), Afrotropic Cocoa Processing Limited, Niche Cocoa Processing Company among others.
Combined, these companies have the capacity to process 50 percent of the over 800,000 metric tonnes of cocoa produced annually.
Meanwhile, Mr Boahen has noted that his outfit is looking to attract more investors into processing cocoa beans for exports into huge markets such as China and now the African Continent under the African Continental Trade Area (AfCFTA) agreement.
According to him, China, now with a middle-income class of 700 million people with increasing disposable income and changing lifestyle are now demanding for chocolate.
This he noted, is evidenced by the country’s attempt at producing cocoa on the island province of Hainan.
He posited that cocoa consumption in conventional markets such as Europe and US have been stagnant occasioned by the high number of aged persons in the two countries as they are now conscious of their sugar intake — cocoa has high sugar content.
But China and Africa have a relatively young population with the median age being 38.1 and 19.7 respectively hence providing a huge market for processed cocoa beans.
The Ministry of Finance and the European Investment Bank on May 19, 2021 signed an agreement for the provision of a one hundred- and seventy-million-euro (€170 million)- $206 million – facility for the establishment of a new national bank, the Development Bank Ghana (DBG).
DBG is an integral feature of the GH¢100 billion Ghana Cares ‘Obaatampa’ Project, which is seeing to the revitalization of the Ghanaian economy following the onset of COVID-19.
The creation of the Development Bank Ghana (DBG) is expected to lead to the reduction and provision of low interest rates for Micro, Small and Medium Enterprises (MSMEs) in the country.
It is also to make wholesale loans to key sectors of the economy, particularly the agricultural and real estate sectors.
DBG in its operations is expected to over the medium-term focus on and transform the industry, agriculture, agro-processing, and housing and mortgage sub-sectors of the economy.
When operational, DBG will deploy products and instruments such as credit guarantee funds, refinancing of Participating Financial Institutions (PFIs) loans, term loans, business development services and factoring, among others.