Ivory Coast takes up the challenge of local raw material processing

Cocoa, coffee, cashew nuts… Africa massively exports its agricultural products without processing them locally, depriving itself of the colossal capital gains on the other side of the world. Côte d’Ivoire, the world’s first producer of cocoa and cashew nuts, seems determined to put an end to this economic nonsense and reverse the balance of power in favor of farmers and local people. With the PCCET, a new project worth 200 million dollars, the Ivorian government aims to develop value chains and the food processing industry on its territory.

Immensely rich in agricultural raw materials, but dependent on the rest of the world for food: that is the unresolved paradox of Africa. The continent, which makes up 60% of the planet’s arable land, theoretically has enough resources to support all its inhabitants and even a large part of the world’s population. But while eight in ten Africans work in the agricultural sector, it contributes only 14% to sub-Saharan Africa’s GDP; and more than 70 million Africans, according to the World Health Organization (WHO), still live in a situation of acute food insecurity. Climate change, natural disasters, political instability or failing infrastructure – not to mention the effects of the health crisis – partly explain this imbalance between apparent agricultural wealth and the absence or weakness of economic benefits for the local population.

Food addiction, economic heresy

Cashew nuts, coffee berries, cocoa beans, citrus fruits, tobacco leaves…: these precious foods grow in abundance on African soil, but do not directly or indirectly feed the people who grow them. Thus, between 2016 and 2018, the continent imported 85% of the food products consumed by its inhabitants. A food addiction expected to cost more than $100 billion by 2025. An economic heresy whose origin lies in the lack of manufacturing industries to produce locally the foodstuffs people need to feed themselves. In other words, the agricultural products grown in Africa are still massively exported, mostly in their raw form, to other continents – particularly to Asia – which have the industrial fabric and labor to transform.

In the agri-food sector, however, it is the processing phase – much more than the production phase, subject to the vagaries of the market or the climate – that generates wealth. Once roasted, peeled, reprocessed or packaged, African foods processed in India, Vietnam or Cambodia are resold several times their purchase price: +89% for Kenyan bananas, +900% for Ethiopian coffee, etc. A real bonanza, of which African producers barely see the color. In other words, Africa has failed to transform its products locally and is not satisfied with exporting the foodstuffs its population would need to feed itself; it moves huge capital gains to the other side of the world. Thus, according to the International Cocoa Organization, only 6% of the approximately $100 billion generated by the transformation of chocolate would go to the producing countries of West Africa. The crumbs of a party from which the African population is excluded.

In Ivory Coast, transform resources locally instead of exporting them raw

As the world’s largest cocoa producer, Ivory Coast is the symbol of this imbalance of power. The country’s authorities are trying to win it by betting on the industrial transformation of “brown gold”. Alassane Ouattara’s government stated goal: to transform 100% of Ivory Coast’s local production by 2025. In particular, to do this, the country has built two new industrial complexes that should help establish the Ivorian position in a cocoa market that was hitherto subject to the regulations of American confectionery giants such as Mars and Hershey. Two successive National Agricultural Investment Plans (PNIA) (2012-2016 and 2017-2022) have also made it possible to revitalize the sector and ensure greater resilience, by promoting industrial initiatives related to cocoa processing – in particular the small chocolate processing that the local market – and by betting on the training of the Ivorian labor force and the formation of territorial agropoles.

The same activism is in order with regard to cashew nuts, of which Côte d’Ivoire is also the world’s largest producer. While only 10% of Ivorian cashews – another name for the precious nut – are currently processed locally, the government aims to exceed 50% by the end of the year. For example, several agreements have been made between the authorities and industrialists in the sector to support the building of a local value chain; tax incentives accompany the structuring of a genuine Ivorian sector; and in October 2020, in Yamoussoukro, President Ouattara inaugurated a brand new Center for Innovation, Technology and Training in the Cashew Sector (CITA), endowed with nearly 4 billion CFA Francs… As many efforts that have enabled Côte d’Ivoire to start early 2021 rose to third in the world in terms of exports of processed cashew nuts.

With the PCCET, the Ivorian government is accelerating the transformation of the agricultural sector

These dynamics could benefit from a new impetus with the recent launch of the PCCET project (Project of Competitive Value Chains for Employment and Economic Transformation), presented on April 2 by the Ivorian Prime Minister, Patrick Achi. The initiative, which is funded by the World Bank at a cost of $200 million, should enable Ivorian farmers to generate a better income. “For many years, the Prime Minister recalled, our country was known as a producer of important agricultural materials. (…) But (…) the countries that have the potential for rapid development are not (the ones) that produce and sell the raw materials” but those that transform them, Mr. Achi remarked again. The PCCET is also part of the “Vision Côte d’Ivoire 2030”, promoted by President Ouattara, aimed at diversifying and profoundly transforming the Ivorian economy and society by focusing on industrialization, infrastructure development and local value-added conquest. So that the Ivorian wealth is primarily for the benefit of those who produce it.

Leave a Comment