Accra, May 23, GNA – Mr Moses Asaga, a Deputy Minister of Finance, on Tuesday told Parliament that the government is seeking about 300 million dollars foreign component to support cocoa purchases in the forthcoming crop season.
Mr Asaga, who was answering questions in the House, said that the Ghana Cocobod had already secured sufficient money for cocoa purchases to ensure that the funds get to the designated banks for payment to the farmers in good time.
Mr Kwakye Addo, NDC-Afram Plains South, had asked the Deputy Minister about measures the Ministry had taken to address the problem of “no money” that cocoa farmers face when they present Produce Buying Company (PBC) Akuafo Cheques at the banks for payment.
Mr Asaga said that during every cocoa season, the Cocobod advances ‘seed fund’ to licensed buying companies to purchase cocoa, adding that the companies then distribute the money they receive to their branches at the society level. He explained that there are inherent delays with some of the companies, especially the big ones, in the procedure for transferring the seed fund to the banks that operate the Akuafo Cheque system, and this tends to create the ‘no money’ problem, especially during the peak periods.
To address this problem, he said the Bank of Ghana always holds adequate stocks of money at its regional offices and designated currency agencies throughout the purchasing periods of the cocoa season for supply to the banks on demand.
The Minister told the House that the arrangement between Cocobod and the PBC with the participating banks to honour cheques presented by farmers and pass on the debit to the PBC for reimbursement, would be extended to other licensing buying companies in the event of lack of funds.
Concerning measures to ensure that cocoa farmers are paid promptly after selling their produce to the PBC, Mr Asaga announced that as at December 30, 1999, Cocobod, through the PBC, made available 348 billion cedis for cocoa purchases. He said the PBC has spent 316 billion cedis out of the money to purchase 140,569 tonnes of cocoa, leaving a balance of 32 billion cedis for further cocoa purchases.
Mr Asaga explained that the 316 billion cedis spent on cocoa purchases were channelled through the various banks, which operate the Akuafo Cheque System. He also said to cover temporary cash shortages in branches of participating banks, the Cocobod and the PBC have arranged with the banks to honour cheques presented by the farmers and also to pass on the debit to the PBC for reimbursement.
The Deputy Minister told the House that the participating banks gave the assurance that they would not turn any farmer away for lack of funds. Asked about steps the Ministry has taken to ensure early disbursement of a 19 million-dollar World Bank credit to organisations, under the government’s Non-Banking Financial Institutions (NBFIs), Credit Assistance Project, Mr Asaga mentioned that the sector has instituted a number of measures to expedite early disbursement of the fund.
He said the Ministry has requested beneficiary institutions to be more proactive in the implementation of their individual components. This would be achieved when they become more familiar with the World Bank guidelines to help them to reduce their mistakes and associated delays to the barest minimum.
The Ministry, he said, has also effected allocation from less active beneficiaries to those apparently doing better in terms of project implementation and disbursement. He said the Ministry is also considering negotiating a possible two-year extension with the World Bank so that institutions like the Bank of Ghana, National Insurance Commission and Ghana Stock Exchange (GSE), which have the bulk of the unused balance, could achieve their objectives.
When the Deputy Minister was told that a senior official from the Ministry is reported to have indicated that the funds are lying idle because the design of the project is ambitious, Mr Asaga said he would not take the report as the official position of the sector. He, however, assured the House that he would invite the official for further discussions on the issue and report the outcome to the Members.
Mr Asaga said a number of recommendations are being implemented to speed up the utilisation of 1.3 million dollars provided by the World Bank under the Technology and Enterprise Development Fund (TEDF) by the beneficiaries.
This followed a mid-term review of the public sector development project by the government and the International Development Association (IDA). Among the initiatives is a 20 per cent reduction in the contribution by a beneficiary from the previous 55 per cent to the current 35 per cent.
There is also an intensification of outreach campaigns by Empretec Ghana Foundation, which was awarded a management contract to disburse the fund, as well as public awareness workshops.
A strategic alliance between Empretec and the Association of Ghana Industries (AGI) has also been formed by which the AGI has been educating its members about the availability of such a fund.
Mr Asaga disagreed with a suggestion of a possible political consideration in the disbursement of the fund, saying that Empretec is a technocrat and not a political entity.
