BoG responds to rollover of matured cocoa bills report, agrees to allow banks to use COCOBOD’s deposits to pay retail customers

The Bank of Ghana (BoG) has reacted to reports that the government has rolled over cocoa bills that matured Thursday, January 20, without the investors’ consent, a move that has sparked anxiety among the investor community.

Investors received payments for the matured bills but their accounts were quickly debited, leading to agitations between some holders and their banks.

“I received payments and was planning to move the funds to my business account to pay some bills, only for me to see that the transaction has been reversed. I don’t know how to pay my suppliers now,” an investor who asked not to be mentioned told 3Business.

The central bank explained that on Thursday, 19th January 2023, a six-month Cocoa bill with face value of GH¢940.42 million matured.

The BoG said it went through the usual processes to reissue on behalf of Cocobod a new six-month Cocoa bill to raise funds to cover the maturing obligation, but unfortunately, the auction failed and was severely undersubscribed resulting in a shortfall of GH¢ 855.42million.

At a meeting held on Friday, 20th January 2023 among the banks, it said Cocobod and Bank of Ghana, it was agreed that all institutional investors will roll over their maturing cocoa bill for Tender 6155. Financial Institutions have agreed to roll over their cocoa bills investments.

“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.

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“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.

“Cocobod has assured us that the outlook for the 2023 crop season is good, and Cocoa purchasing are ahead of last year. We therefore expect that this shortterm cash flow challenges facing Cocoa Board will be resolved soon to enableCocobod meet its obligations to investors,” a statement issued by the BoG on Monday Janury 23 said.

By Laud Nartey||Ghana