Cote D'Ivoire: Hot Chocolate
The Cote d’Ivoire 2010 Presidential election saw Laurent Gbagbo’s refusal to concede defeat fan the flames of appalling post-result violence which resulted in over 3000 deaths and threatened to split the country in two. Fast forward five years and late last month President Ouattara was re-elected with 84% of the votes cast and barely a murmur.
At one level, his overwhelming victory reflected the divisions among the opposition. But the key driver was that Cote d’Ivoire has stood out as a strong SSA economic performer over the last three years with average growth and inflation rates of 9.1% and 1.4% respectively. The current and budget deficits are also safely in anchored within their comfort zones. The Elephants victory in the African Cup of Nations tournament earlier this year, where they beat arch-rivals Ghana in the final, has added to a long-awaited national mood of renewal.
In contrast to most of SSA’s traditional raw material exports such as oil and metals, cocoa prices have been fairly firm over the last year on the back of what increasingly seems to be a structural shortfall of supply relative to demand. Consequently, it is no surprise that the main SSA producers, Cote d’Ivoire, Ghana, Nigeria and Cameroon, who collectively account for 70% of world output have sought to capitalise.
President Ouattara has moved first by announcing his aim for the nation to produce 50% of global cocoa bean supply by 2020. Cote d’Ivoire is well placed for success. The government provides good technical, seed distribution and crop spraying support to the sector which has led to record levels of production in recent years. These advantages will only be enhanced by the forthcoming relocation of the headquarters of the International Cocoa Association from London to Abidjan. Moreover, its relatively stable currency, which is pegged to the euro, reduces income risk.
But the President also realises that moving up the value chain is critical. Consequently, he is also championing increasing domestic processing, which includes bean grinding which is one of the first stages of producing a wide range of items including chocolate and cocoa powder. Once again the portents are good. French-owned Cemoi opened a full-processing plant in Abidjan earlier this year and has started with making cocoa powder and spreads. Full chocolate production is expected in 2016.