Resource-Backed Loans and Their Implications on Value Addition in Commodity-Dependent Countries: The Case of Ghana’s Cocoa Syndicated Loans
| Dates: | 9 October 2024 |
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| Times: | 16:30 - 18:00 |
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| What is it: | Webinar |
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| Organiser: | Global Development Institute |
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| Who is it for: | University staff, External researchers, Adults, Alumni, Current University students, General public |
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Commodity-dependent countries increasingly leverage Resource-Backed Loans (RBLs) to access international financial markets. In Ghana, the cocoa regulator, COCOBOD, has raised nearly $30 billion through the Cocoa Syndicated Loan, a form of RBL, since 1993. While these loans offer short-term benefits, such as financing cocoa purchases and supporting foreign exchange reserves, they have also created a "middle value-added trap," constraining Ghana’s ability to ascend the chocolate value chain. In 2024, COCOBOD made a decisive move to phase out the 30-year-old Cocoa Syndicated Loan in favour of domestic/indirect financing, aiming to reduce pricing risks and promote value addition. This lecture will explore the strategic implications of this shift and discuss pathways for Ghana to fortify its cocoa sector and enhance economic resilience.
Speaker: Fuad Abubakar Mohammed
Fuad Abubakar Mohammed is a Cocoa Supply Chain and Market Analyst with over 15 years of experience in the global cocoa industry. As Managing Head at Ghana Cocoa Marketing Company UK Ltd., he engages extensively with cocoa value chain actors, including farmers and chocolate companies. Fuad conducts cocoa market intelligence and manages Ghana’s international relationships, focusing on market consolidation and value addition. He co-authored academic and policy focused papers and publications, including “Potential for Upgrading in Financialised Agri-food Chains: The Case of Ghanaian Cocoa” (The European Journal of Development Research), "The Political Economy of Pricing and Price Risk in Ghana’s Cocoa Marketing System" (GDI Working Paper) and "Why Ghana Does Not Get the Full Value of Its Cocoa Beans and How This Could Change" (The Conversation).
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