Heated debate in Parliament over $ 600m ADB loan

The report of the Finance Committee of Parliament on the Long Term Loan Facility Agreement between the government and the African Development Bank for an amount of US$600 million generated heated debate on the floor yesterday.

Despite the fact that the Minority agreed in principles over the benefits the country would derive from the loan, they were of the opinion that some of the expenditure as captured in the report were either on the high side or unnecessary.

As a result the House wanted the report to be accepted through a voice vote.

 The Minority Chief Whip, Alhaji Mohammed Mubarak Muntaka insisted that voting on the matter should rather be on head count, a situation that necessitated an adjournment on the matter.

Dr Mark Assibey-Yeboah, Chairman of the Finance Committee presenting the report, which also sought Parliament clearance to wave a Stamp Duty of 0.5 per cent amounting to US$3 million said the facility was part of the measures to ensure sustainability in the cocoa sector in terms of mitigating harsh effects of declining prices, building resilient and robust sector capable of rendering appreciable and sustainable benefits to farmers and the national economy.

He said the adopted strategies required immediate investment in critical areas that included farm productivity, enhancement and control of Cocoa Swollen Shoot Virus Disease, (CSSVD),

Others include increase storage and warehousing capacities as part of export control measures, promotion of processing and consumption to increase demand and establishment of a stabilisation fund to cushion the industry against unexpected declines in world price.

Giving a breakdown of utilisation of the loan proceeds, Dr Assibey-Yebaoh said the breakdown included: Hand Pollination (US$68,111,111.00), Farm Irrigation (US$40,683,678.61), Rehabilitation-CSSVD (US$140,288,242.27), Rehabilitation-Moribund Farms (US$82,711,757.73), Warehouse Capacity (US$50,000,000.00), Farmer Database (US$10,688,762.21), Promotion of Domestic Processing (US$200,000,000.00), Promotion and Consumption (US$7,516,448.07) all totalling to the amount of US$600,000,000.00.

He said officials of COCOBOD explained to the committee that upon the expiration of the grace period, COCOBOD would set aside about 46,000 tonnes of cocoa beans as collateral for the repayment of the facility.

He added that the quantity of cocoa beans was said to be well within COCOBOD’s capabilities since presently, cocoa beans collateralisation arrangements involved about 560,000 tonnes for the annual syndicated loan and 50,000 tonnes for the existing short-medium term facility.

He explained that the US$200 million earmarked for the promotion of domestic processing of cocoa was intended to help credible local processors with working capital to enable the beneficiary processors to expand their production in a bid to help achieve the national target of 50 per cent of locally processed cocoa beans.

According to Dr Assibey-Yeboah, as part of the measures to boost productivity per hectare of cocoa farm, COCOBOD plans to engage about 30,000 hand pollinators to work on about 72,000 hectares of cocoa farms to ensure increase flower production.

However, the Minority was not enthused about assurances and the general manner the disbursement of loan facility was couched under the report.

 Mr Haruna Iddrisu, the Minority Leader called for the appearance of the Finance Minister to appear in person before the House to explain in loan details.

He said there was the need for the Minister of Finance to clarify the beneficiaries of the US$200 million meant to boost local processing of cocoa.

Mr Iddrisu argued that the US$200 million meant for four private companies could help establish more industries in the sector to boost productivity as well as mitigate the unemployment situation in the country.


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