$48m jute sack contract signed in Dec 2024 despite 110,000 unused bales - Acting Cocobod CEO

The Acting CEO of Ghana Cocoa Board (Cocobod) criticized a $48 million jute sack contract. He called it reckless and said it worsened Cocobod's financial issues.

Dr. Randy Abbey spoke on Joy News’ PM Express Business Edition on June 5. He expressed shock at Cocobod's management under the Akufo-Addo administration.

He mentioned the jute sacks contract, stating, “They issued an irrevocable letter of credit for $48 million in December 2024.” He noted that over 110,000 jute sacks had not been cleared in three years.

Despite this surplus, Cocobod awarded a new contract for 80,000 bales worth $48 million. Dr. Abbey emphasized that they still proceeded with the contract.

He explained that these bales are arriving now. Under the irrevocable letter of credit terms, payment must be made once the bill of lading is presented.

“Once we receive the bill of lading and give it to the bank, they will release $48 million,” he said. “That is how this place was run.”

Dr. Abbey recently took charge and described Cocobod’s financial state as grim. The Board owes agrochemical suppliers over $400 million.

He stated that total debt is close to $33 billion but may change due to cedi appreciation. “We owe agrochemical suppliers over $400 million,” he reiterated.

He clarified confusion about the Cocoa Roads project cost. Many think the GH¢21 billion cost is part of the $33 billion debt.

“No, it is only $4.4 billion,” he explained. This amount represents work done and certified for payment.

Dr. Abbey revealed that Cocobod is undergoing a rationalization exercise now. They are assessing which contracts can be canceled or transferred to other ministries.

He shared his daily experiences at Cocobod with concern. “When you got here, you waited about an hour,” he said about companies chasing payments owed by Cocobod.

“Every day I’m dealing with solicitor letters or court issues regarding debts,” he added.

The situation is severe; some obligations date back four years without payment. “We owe people for four years, three years, two years, and one year,” he noted.

When asked if Cocobod could balance its books soon, Dr. Abbey said it would take time to resolve issues properly.

“Our first task was figuring out how to deal with it,” he stated confidently about future projections for recovery within four years.

“Now we have to redo our books because of cedi appreciation.”

Dr. Abbey raised concerns about procurement practices at Cocobod regarding issuing irrevocable letters despite existing inventory challenges.