Fact that Ghana and Ivory Coast are still cocoa price takers is criminal – Minister
The Minister of Finance, Ken Ofori-Atta says the fact that Ghana and Ivory Coast are the largest producers of cocoa in the world but still remain price takers is criminal.
Mr. Ken Ofori-Atta was speaking during a panel discussion at the third Development Finance Forum (DFF) held in Accra, Ghana on Wednesday May 31, 2017. The Accra Forum was the first time the meeting was held in Africa.
“Fact that Ghana and Ivory Coast produce about 60 to 70 per cent of the world’s cocoa, and we are still price takers, is criminal,” he said.
Mr. Ofori-Atta also called for seriousness about regional integration with regards to free movement, free trade and what citizens can do.
The DFF, organized by the World Bank Group and the African Center for Economic Transformation, brought together public and private sector leaders from around the world to explore innovative approaches to radically increase private sector investment in Africa’s priority sectors.
The forum focused on addressing the policy and institutional barriers that hamper sustained economic growth in Africa—aims to identify constraints to developing a vibrant private sector and opportunities for attracting investments that can make a positive impact on people’s lives, the World Bank said.
According to the Bank, in the past year, several initiatives have been developed to crowd-in private finance for development and contribute to achieving the ambition of the 2030 Agenda and the Addis Ababa Action Agenda.
“In December 2016, the World Bank Group’s International Development Association (IDA) completed a record $75 billion replenishment, a pivotal step in the movement to end extreme poverty. $45 billion of this is targeted to Africa.
A groundbreaking new initiative under IDA18 is the new $2.5 billion Private Sector Window (PSW)—a joint initiative of IDA, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA)—to mobilize private sector investments with strong development impact in the most challenging areas: those countries eligible for IDA support and post-conflict environments,” it added.
It is on record that Africa produces about 75 per cent of the cocoa in the world, but gets just about two per cent of the $100 billion a year revenue of the chocolate industry.
Another example of the cocoa processing industry is that of The Netherlands, which imports 85 per cent of its cocoa beans from Africa.
According to a report by Statistics Netherlands (CBS), the total value of chocolate and semi-finished products including cocoa butter produced in that country and exported, reached €2.8 billion in 2015. That is an increase of six per cent on that of 2014 and an “all time-record.”
The CBS noted that The Netherlands, which is a global trade hub for cocoa beans and semi-finished products as well as being the world’s biggest importer of cocoa beans, raised its export earnings to €4.5 billion euros when re-exported goods are included.
The country imported more than 700 million kg of cocoa beans, exceeding the previous record year (2011) by 2 per cent.
“About 85 per cent of cocoa beans are imported from Ghana, Ivory Coast, Cameroon and Nigeria; £1.4 billion euros worth of cocoa beans were imported to be processed into semi-finished and final products,” the CBS said.
In April this year, Ghana and Ivory Coast met to take decisions on how cocoa price volatility has been unfavourable to the two West African neighbours.
On Wednesday April 12, 2017, the two countries agreed to do something about cocoa price volatility. During the Cocoa and Coffee Council meeting in Abidjan, they agreed to deepen collaboration and coordinate their production strategies in order to tackle price volatility.
Analysts have meanwhile, warned that the prices of cocoa at a 10-year low is expected to put pressure on the economies of the two countries.
In the 2015/2016 production year, Ivory Coast produced a total of 1.7 million metric tonnes of cocoa and Ghana produced some 840,000 tonnes. Ghana is targeting one million metric tonnes for the 2016/2017 production year.
This week, the two countries are meeting in Ghana to discuss how to enhance farm level productivity, marketing and issues of interest in international affairs, as well as to devise strategies for mitigating the harsh effects of declining prices on cocoa farmers.
There are calls for African countries to stop exporting raw produce such as cocoa beans, and to start adding value to raw materials by processing them before exporting.
By Emmanuel K. Dogbevi
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