Cocoa production in Africa is set to take a turn for the better, as the African Development Bank (AfDB) begin plans to support producers of the crop on the continent. Among other planned interventions, the Bank is considering support to Ghana and Côte d’Ivoire to reduce the volatility of the international prices of cocoa. Côte d’Ivoire leads the world in the production and export of cocoa.
Ghana and Côte d’Ivoire are now at the final stages of discussions for AfDB support. A final deal is expected to be announced in the days to come. But following high-level meetings between the governments of both countries and the AfDB President, some key agreements have already been made. The Bank has agreed to assist the countries to establish a Cocoa Market Stabilisation Fund and a Cocoa Exchange Commission for the management of production.
The AfDB has also agreed to work with them to establish a Cocoa Industrialisation Fund to further grow the cocoa industry. The Fund will help in developing the regional markets for by-products and domestic processing for targeted African regional markets. The overall objective is to stimulate and expand consumption. In line with this, the two countries have jointly requested for US $1.2 billion for mutually identified projects: to tackle the cocoa swollen shoot virus disease; build storage and warehousing facilities; promote processing and consumptions; establish the Africa cocoa exchange; and to establish the stabilization fund.
The President of the African Development Bank (AfDB), Akinwumi Adesina, stressed the commitment of the Bank during a three-day visit to Ghana, August 1-3, 2017. Adesina stressed that although Ghana and Côte d’Ivoire produce 64% of the world’s cocoa, they play no role in controlling the market.nHe spoke about the Bank’s plans to support Ghana and Côte d’Ivoire to transform the cocoa industry and create more jobs and wealth from the produce.
“AfDB has received a request for $1.2 billion from Ghana’s Minister of Agriculture and from the Cocoa and Coffee Board of Côte d’Ivoire. We are looking at building warehouses so you can store the cocoa and not have to sell immediately after harvest,” he said.
He said the planned establishment of a stabilisation fund is to deal with the volatility of prices and also to recapitalize old cocoa plantations. Part of the loan will also finance the construction of modern storage facilities, farm rehabilitation and disease control, including compensation to owners of cocoa trees ravaged by swollen-shoot viral disease, Adesina explained. Ghana has to move to the top of the cocoa value chain by processing and adding value to what it produces, Adesina said. He also noted that Ghana has to work closely with other countries, particularly Côte d’Ivoire, to ensure that Africa plays a greater role in the cocoa production process.
“We must use agriculture to create wealth for our farmers. To do this, we must make sure that we add value and process everything that we produce. Agriculture is not a way of life. Agriculture is a business.” Chief Executive Officer of the Ghana Cocoa Board (COCOBOD) Joseph Boahen Aidoostressed the need to stimulate local consumption as part of efforts to enhance production. He spoke when the AfDB President visited the Cocoa Processing Company (CPC) in Tema, a city near Accra, Ghana. Africa consumes very little of cocoa. Ghana is an example of a cocoa-producing country where local consumption is very limited.
“Value addition is the only way we can have a say in the market. As it is now, international prices are determined either at the New York Stock Exchange or the London Stock Exchange. We do not have any say.”
