The African Development Bank claims that cocoa production in Africa “is set to take a turn for the better” after it announced plans to support producers. 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.
In a recent statement, the bank said Ghana and Côte d’Ivoire were in the final stages of discussions for AfDB support and a final deal was expected.
The bank has agreed to help the countries to establish a Cocoa Market Stabilization Fund and a Cocoa Exchange Commission for the management of production. The AfDB also agreed to work with them to establish a Cocoa Industrialization 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 AfDB, Akinwumi Adesina, said “AfDB has received a request for US$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. The idea of buffer stocks held in the two countries has been proposed as a way of supporting the cocoa price.
He said the planned establishment of a stabilization fund is to deal with the volatility of prices and also to recapitalize old cocoa plantations.
Although welcomed by farmers the plan has met with a mixed reception elsewhere and with scepticism about whether it will come to anything.
For more information see the forthcoming November 2017 issue of Coffee & Cocoa International.