09 Jan

Côte d’Ivoire: Africa’s fastest growing economy’s bittersweet year

This April, cocoa farmers in Côte d’Ivoire awoke to find their crops had lost over a third of their value overnight. The government of the world’s largest cocoa producer had slashed the price it guaranteed farmers by 36%.

Cocoa producers would now be paid a price of around 700,000 CFA Francs ($1,250) per tonne. The Ivorian government said it would maintain this reduced level for the April-September harvest, but later extended the measure to March 2018.

The administration felt it had to take this drastic measure given the difficult prevailing circumstances. Cocoa has long been the cornerstone of Côte d’Ivoire’s economy – accounting for around a fifth of its exports – and low prices due to global oversupply have hit the nation hard.

In April, the government was forced cut its annual budget by 10%. In May, it announced a loss of $1.1 billion in export earnings. And despite lowering prices, its stabilisation fund had diminished by 300 billion CFA Francs ($54 million) as of this October.

Lowering prices paid to farmers was a way to help Côte d’Ivoire keep its head above water. But the measure was not without controversy. According to cocoa farmer spokesperson Bile Bile, the price cut has had an “extremely negative impact on the lives of farmers”. Moreover, the contrasting approach taken by Ghana added further complications.

Across the border, President Nana Akufo-Addo, who came to power in January, had promised farmers a fair price as part of his election campaign. Trying to honour this pledge, he declared that Ghana, the world’s second biggest cocoa producer, will retain its farmgate price of 7,600 cedis ($1,710) per tonne.

A galaxy apart

This has meant that as of April, it has been around $500 per tonne more lucrative to sell cocoa beans in Ghana than Côte d’Ivoire. Levels of cross-border smuggling have surged.

In June, exporters estimated that 80,000 tonnes of cocoa beans had been smuggled into Ghana since the price drop. Côte d’Ivoire’s cocoa regulator, Le Conseil du Cafe-Cacao (CCC), predicted a fifth of its harvest could be lost to Ghana next season if the price discrepancy continued.

To read the full article, click here.

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