The Ghana Cocoa Board (COCOBOD) has been burdened with a relatively high loan portfolio over the past years.
This is contained in a report by the Auditor General on the Public Accounts of Ghana’s Public Boards, Corporations, and other Statutory Institutions for the period ended December 31, 2021.
In the report, the Auditor General noted that COCOBOD has debts totalling GH¢12,301,211,685.40 as of the end of the 2019/2020 financial year.
The Auditor General also said his review indicated that the board did not provide any effective plans to reduce its debt burden in the future.
The table below shows the increase in financial costs as of September 30, 2020.
The report further noted that the absence of sustainable debt plans coupled with the absence of effective long-term cost control measures resulted in this state of affairs.
“The debt burden resulted in increased finance costs over the years.”
The Auditor General warned that if this is not managed effectively, the cocoa industry will be crippled.
The table below shows the increase in finance during the year,
The Auditor General urged Management to deploy and implement effective plans and strategies that would lead to a reduction of the Board’s debt burden within the medium to long term.
“Management has a detailed plan in place to reduce debt on the books of COCOBOD. COCOBOD is implementing tighter budgetary controls to ensure that debt is not accumulated, but rather we make savings to repay all debts on our books.”
Section 90 of the Public Financial Management Act, 2016 (Act 921) stipulates that the governing body of a public corporation or state-owned enterprise shall establish and maintain policies, procedures, risk management, and internal control systems, and governance and management practices, to ensure that a public corporation or state-owned enterprise manages its resources prudently and operates efficiently in accordance with the objectives for which the public corporation or state-owned enterprise was established.