Business News of Tuesday, 8 August 2017
The President of the Africa Development Bank, Dr Akinwumi Adesina, has charged Ghana to get off from the bottom of the cocoa value chain and move to the top by processing and adding value to what it produces.
Ghana is one of the largest producers of cocoa in the world. Both Ghana and Ivory Cost account for 65 percent for the global production of cocoa.
According to Dr Adesina, Ghana does very well in terms of production of raw beans but it is not doing well in terms of processing it into finished products which is exactly the vision of the Cocoa Processing Company (CPC).
The CPC currently has a storage capacity of 5,000mt which is 2.5percent of what the company is supposed to have as it can potentially store up to 800,000 mt of cocoa beans, and can process only 64,500 mt of cocoa.
Dr. Adesina who toured CPC factory in Tema said for the country to increase in revenue is getting from cocoa, then it has to work with other countries particularly Cote D’ Ivoire to ensure that it is not in a situation that it is price takers.
He said Ghana can influence the market by way of processing a lot of it cocoa bean to add value to it saying “you influence the market in terms of the volume of production that you release on the market. Secondly, you influence the market by the market structures that you engage in to be able to influence.
“You also influence the market depending on what kind of market you looking at, if you looking at the global market without building the local and regional market you will not be as effective as you ought to be because you will be subject to the volatility of that market.”
According to Dr. Adesina, the situation today is that Africa does not influence the price of cocoa on the global market and this, he said, means that Africa is working for others.
He said while others are processing and making money then the farmers in Africa are poor. “My view is that Africa cannot and must not be a museum of poverty in which others make money and Africa farmers are left with absolutely nothing.
“We must use agriculture to create wealth for our farmers and to create wealth for them is to make sure that we add value and process everything that Africa produces,” he added.
He said agriculture is not a way of life neither it is a development activity but must be seen as a business.
He revealed that the size of the food and agriculture in Africa will rise to US$1trillion by 2030. He said if the size of food and agriculture is rising to US$1trillion in 2030, then the question to Africa is “is Africa just going to be the market for others, or is Africa going to add value to all it produces to take advantage of the market,” he asked.
“I think we shouldn’t just be a market for others, we should process and add value to everything we produce that is why agricultural industrialization is very important
To make industrialisation of agriculture a reality, Dr Adesina said the AfDB will invest US$1.2bilion into the industrilsation of agriculture in Ghana and Cote D’ Ivoire the two major producers of cocoa in the world.
The money will also be used to establish a cocoa market stabilisation fund that will reduce the kind of volatility that is experiencing in the commodity market.
The price of cocoa went down from over US$3,000 per tonne to just about US$1,800 per tonne. This according to Dr Adesina, makes Ghana and Cote D’ Ivoire lost a billion dollars each.
“So, how can you be producing so much and lose because others want to determine the price for you,” he queried
The other part the money will be establishing is cocoa induistrilisation fund that will support the industrial development of cocoa which companies such as the Cocoa Processing Company of Ghana can take advantage of in order to strengthen its capacity to expand its facilities to be able to process more cocoa bean.