“We are in the business of delivering water to Europe,” said a minister. Quite ironical, given a city where residents have persistently complained about the lack of water. His point was that 70% of the cargo weight of the unprocessed coffee exported to Europe is water as contained inside the beans. We were footing the high expense of air cargo, yet getting virtually nothing in return for this extra expense. This story is true for many an African country exporting raw materials to Europe, be it coffee, gold, or cocoa beans. Cote d’Ivoire, the world’s largest producer of cocoa beans, has recently bucked the trend. In December 2014, it was announced that Cote d’Ivoire was going to surpass the number one cocoa processor, The Netherlands, in grinding cocoa beans. The history of the relationship between Africa as the source of raw materials and Europe as the source of value-addition is often tied to colonial legacies and immutable contracts. This is not to say that skills are not also key to that process. Value addition creates the wealth part of the equation. The chocolate confectionary post-processing is estimated to be worth between $80-100 billion. Whereas the value of The Ivory Coast’s export of cocoa beans is US$ 1.2 billion. It is noteworthy that a country that has only recently emerged from civil war has managed to exceed the processing capacity of a highly sophisticated economy. In 2012, Cote d’Ivoire announced it was no longer satisfied with exporting raw materials and took steps to increase its processing capacity to 50% of the cocoa grown. Rwanda has astounded the world with its numerous successes. Where doubts were cast, the country showed that it could do it. The Ivory Coast’s cocoa story is yet another Africa success story. The story, for me, also reflects the key messages in President Paul Kagame’s End of Year Speech; the core of which is the unwavering need for self belief. I highlight some aspects of the President’s speech as concepts here. The need to make use of available opportunities to reach goals: Following a slump in global cocoa bean harvests, there were too many processing factories for the amount of beans available and profit margins shrank. Things began to change and African cocoa crops grew by 12% in the 2013/14 period. Cote d’Ivoire was able to jump on the upward swing of increased cocoa production with new processing capacity. Not to avoid change or challenges, just because they seem difficult: Africa stays enmeshed in the belief that it is only capable of producing raw materials for export. Cote d’Ivoire Coast demonstrates that this can not only be different, but that an African country can also be at the top of the industrialisation game in a given sector, beating both the USA and the Netherlands. Persistence and practice yield results: The Ivorian government’s cocoa sector reforms are primarily focused on improving the lives of farmers. Previously, the government sought to ensure cocoa products remain competitive in Europe/USA. Current reforms abandon liberalisation and aim to guarantee that farmers receive at least 60% of the average international price. The government has also ended the export tax break for processors. The reforms risked losing key international investors in the processing end of the market. But in the end, the government persisted, did not renege on the reforms and the investors did not leave. Don’t do it alone, find others who share the same goals and work together: The Ivory Coast provided incentives that would lead to growth of the processing sector. Along with local processors, there are other large global processors from Europe and Asia in the Ivorian market. Remembering that we move forward when we look after each other, and combine our strengths: As part of its strategy to build the country’s cocoa processing capacity, the Ivorian government sought to improve the lives of farmers by giving them higher farmgate prices for their cocoa crops. Without the farmers, over 70% being families living on less than US$ 2 per day, there would be no cocoa beans to grind. Reports state that the higher farmgate prices have boosted farmers’ incomes, bettered crop husbandry and incentivised farmers to adhere to tighter quality controls, thereby improving post harvest handling. To conclude, the President in his speech said that “we still have a long journey ahead”. Some years back I ate delicious, locally manufactured, dark chocolate in Ghana. Unfortunately it was only available in Ghana. The grinders earn only 7% of the supply chain value (farmers earn 3%). Their role is to turn cocoa beans into butter and powder, the main ingredients for chocolates. With chocolate confectionary industry worth close to US$ 100 billion, Africa cannot afford to remain at the first processing stage and ignore the sweet taste of further value-addition. Currently based in Rwanda, the writer comments about people, organisations and countries whose stories create a chrysalis for ideas. Contact: mmuteshi@ymail.com
