The abstinence of the 21 banks means only foreign banks took part in the transaction, which has now become an annual funfair for international lenders with interest in commodities financing.
But some of the banks the paper spoke to blame their abstinence on the low interest on the loan at 1.19 per cent.
Out of the 22 banks that participated in this year's exercise, 18 of them were entirely foreign institutions; six had local presence but participated through their parent banks and only one, Ecobank Ghana, participated directly.
The Executive Director of the Ghana Association of Bankers (GAB), Mr D. K. Mensah, said the development was "an indication of the type of economy we have."
"If you have a strong economy, you can always handle these things locally but as it is now, even if you put the capitalisation of all the 29 banks together, you won't get that amount," he said in a chat on September 18.
Currently, the Bank of Ghana’s regulations require universal banks to maintain a minimum capital of GH¢120 million (US$31.5 million), which brings the total capitalisation of the banking industry to GH¢3.48 billion or US$915.7 million.
"If you look at it well, you will realise that it is not as if they by-passed the industry, no! It’s an issue of capacity," Mr Mensah added.
Some of the banks the paper spoke to said the syndication offered low interest on the loan.
"It always saddens my heart when we have a foreign financial institution leading it; it doesn't make sense. Even we as a country must sit down and say okay, a local financial institution should lead it for the foreign ones to participate in it, but the question is how strong we are? Second, do we have the capacity to take up the cost of even investing in it," a banking sector chief executive asked on condition of anonymity.
"My average dollar loan will be around 10 per cent or so but COCOBOD is looking for three, four per cent. So, the returns are not attractive to me because my sources of funds are expensive. Generally, I will say that we do not have the financial muscle or power to do some of these things," another CEO added.
The Public Affairs Manager of the COCOBOD, Mr Noah Amenyah, however, said the board, just like any entity, would always prioritise value over cost hence the decision to push for loan syndication with low interest rates.
"With the current interest rates, I don't think that COCOBOD can go and pay that high rate when there are lower cost funds in the market. I personally think the Ghanaian banks will have to sit up, it’s a facility that comes every year, we repay and there is no default; this is backed by deliverable cocoa contracts,” he added.
The absence of the local banks thus confirmed long-held views that banks in the country have failed to build the necessary capacity that will make it possible for them to underwrite big ticket transactions such as the COCOBOD loan, the Eurobonds and the US$4.9 billion currently used to develop the Tweneboah-Enyera-Ntomme (TEN) oil and gas project.
The same applies to the insurance industry, where local insurers are unable to provide insurance cover for the countries maiden Floating, Production, Storage and Offloading (FPSO) vessel currently used in the Jubilee Field.
The net result of these failures from the local financial sector has been capital flight from the country to offshore accounts, which every now and then exert pressure on the Ghana cedi to depreciate.
In the cocoa loan, for instance, the principal, as well as about US$1.8 million will be repatriated to the participating banks when the board completes repayment of the loan in August, next year.
Although the inflows will help shore up the country's reserves, stabilise the cedi and support the cocoa sector, the repatriation of the profits and principal will lead to deepening the capital flight in the system, which is estimated at US$1.2 billion per annum.
Mode of syndication
COCOBOD, which has been syndicating funds for cocoa bean purchases since 1992, sources for the funds in a way similar to what every loan-seeking business does in the financial market worldwide.
"Once a bank is comfortable with us then it goes forward to tell the interest on their funds and things like that. We are just like any other business; we look for low and attractive rates. If a bank's rates are too high, then we will have to turn to another," Mr Amenyah explained in an interview.
"There are actually times when COCOBOD drops some of the banks from the transaction because their rates and other charges may not be attractive and that mostly applies to the local banks; they charge high rates," Mr Amenyah added.