Joe Jackson, the Director of Business Operations at Dalex Finance, asserts that COCOBOD’s call for holders of its short-term debt securities (Cocoa Bill) to exchange them for longer-term debt securities is indicative of the government’s inability to fulfill its debt obligations.
According to Jackson, this invitation mirrors the recent domestic debt exchange program undertaken by the government. In an interview on Eyewitness News on Citi FM, he explained that the cocoa bills, originally set to mature in August, will not be paid off but instead extended until 2024.
Drawing parallels to the government’s previous actions with domestic bonds, Jackson argued that both the government and COCOBOD are essentially admitting their inability to settle their debts. The most recent Cocoa Bill, issued in February 2023 at an annual interest rate of 32.22 percent, was scheduled to be paid off in August.
However, under the new proposal, the interest and principal will be consolidated into a single amount. The interest payment on these bills will be spread out over a span of five years, offering temporary relief to the government.
To illustrate, Jackson provided an example where Cocoa Bills worth GH¢68 and interest worth approximately GH¢32 (totaling GH¢100) would be distributed as follows: 5 percent paid in 2024, 20 percent in 2025, 25 percent in 2026, 25 percent in 2027, and 25 percent in 2028.
This arrangement means that the funds due to be received this year, along with the accrued interest, will be divided over the course of five years starting in 2024. Jackson described this as another form of financial loss or “haircut.”
Furthermore, Jackson criticized COCOBOD for deviating from its original mandate and failing to honor its debts. He pointed out that COCOBOD has mismanaged its affairs and has not published its accounts since 2020, suggesting that the organization has been utilizing the funds for purposes other than its primary objective of cocoa purchases.
Source – citinewsroom.com
