I attended a State Dinner in Accra a couple of nights ago in honour of President Ouatttara of Ivory Coast. Ghanaian President Nana Akuffo Addo made a speech which included the striking fact that Ghana and Ivory Coast produce between them 65% of the world’s cocoa, and yet receive only 5.5% of the income of the world chocolate industry.
This simple fact sums up much of the dilemma of Africa; stuck in primary commodity production and still, after decades of concentrated effort, unable to develop value added or to obtain a price for commodities – and particularly for farmers – that reflects their importance to the global value chain.
Cocoa has been one of the most successful areas of endeavour for the Fairtrade movement, but all of that has only resulted in that 5.5% figure, which without Fairtrade would be still lower. It is possible to buy Ghanaian made finished chocolate product in British supermarkets now, and excellent it is too, but it has a very small market share. Producing finished chocolate in Africa has its problems; chocolate is a much more delicate cargo than cocoa beans and reacts badly to either heat or refrigeration. Recipes which overcome this problem result in a certain harshness.
There has been some progress made in processing of the raw cocoa beans in Africa into butter and solids, but not on a scale which fundamentally affects the market.
The current Ghanaian government has made a major point of this issue. Here is Finance Minister Ken Ofori Atta addressing it at the G20 Summit for Africa earlier this year. There is however no desire by the political and corporate establishment of the developed world to assist in any way.
Cooperation with Ivory Coast is obviously key to progress, but the two countries lack the financial reserves that would be required to initiate effective cartelisation; while I have to admit, against my own inclinations, that a free market in sales by the cocoa farmers has provided a much better living to them than the decades of efforts at state monopoly or various forms of price intervention. In Ghana both the Minister of Trade and the Chairman of the Cocoa Board at the moment happen to be old friends of mine and I hope to discuss the possible ways forward with them over the next week or so.
The situation is even further complicated by the hypothecation of Ghana’s cocoa revenue some years ago to repay China for the Bui Hydroelectric dam project. This was always a very poor project in terms of design and available water in the Volta watershed, and has had a number of disastrous wildlife consequences. There has been a huge amount of trumpeting of Chinese “aid” projects in Africa, but my experience has been that they are even more designed to help the “donor” country than Western aid, and almost always turn out to be loan rather than grant. As with the Bui Dam project, this is usually disguised in a lack of transparency about the underlying financial arrangements, and the Chinese surge into Africa has ramped up levels of corruption still further.
All that is true throughout Africa. There has been a further development specific to Ghana. Chinese convict labour was imported to build the Bui Dam. Many of the workers absconded into the countryside, taking the earth moving equipment with them, and started illegal gold-mining....MORE