African youth to be empowered to boost business opportunities in cocoa sector

The African Development Bank (AfDB) and the International Cocoa Organisation (ICCO) have pledged to empower African youth and women in the cocoa value chain to boost business opportunities in the African cocoa sector. 

The collaboration will seek ways to strengthen value addition and promotion of cocoa and chocolate consumption in Africa, access to credit, market access and commodity exchanges, adoption of profitable cocoa farming models and thriving cooperatives, logistics and transportation.

Cocoa production is a very labour-intensive activity and a source of rural employment. Many activities in cocoa production, post-harvest processing, marketing functions and value addition could represent a viable source of revenue for women leading to their economic empowerment.

The two institutions met in Abidjan, Côte d’Ivoire, to strategise for cooperation to foster transformation of the cocoa industry in Africa.

A statement said cocoa is one of the five Cs (cocoa, coffee, cotton, cassava and cashew) that have been selected for support under AfDB’s new Agriculture and Agri-business Draft Strategy. Africa produces 73 percent of world cocoa, with more than 70 percent coming from Ghana, Côte d'Ivoire, Cameroon and Nigeria.

It is a major export earner, yet its production is still in the hands of ageing smallholder farmers with more than 70 percent productivity losses as a result of numerous challenges.

The statement noted that the processing and market are in the hands of foreign investors.

While global cocoa production is valued at approximately US$12billion on the export market with cocoa farmers receiving about US$8billion in revenue; the world chocolate market is valued at US$110billion.

The statement explained that chocolate value addition in warehousing and other logistical services, chocolate production and packing, retail networks, and all associated logistics is 10 times the value of Africa’s cocoa exports.

Chiji Ojukwu, AfDB’s Agriculture and Agro-Industry Director said: “The large potential and opportunities offered by the cocoa sector have not been fully exploited by producing countries, nor have they taken advantage of existing technological progress and innovations in the way other commodities have”. 

Cocoa is still produced by impoverished smallholder farmers, and most cocoa producing countries continue to export cocoa beans as raw materials without adding value.

Within the global value chain, most of the money is made after the beans have reached the north. At the same time many cocoa farmers and workers in the south have to get by on less than US$1.25 a day, below the threshold of absolute poverty.

“Cocoa growers today receive about six percent of the price that consumers in rich countries pay for chocolate. In the 1980s their share was almost three times as great: 16 percent.

“As a result, the African cocoa sector faces considerable challenges that need to be addressed in order to sustain or even increase its contribution to the economies of producing countries,” the statement said.

Aly Abou-Sabaa, AfDB’s Vice-President in charge of Agriculture, Water, Human Development, Governance and Natural Resources said: “A transformation agenda is required, wherein cocoa farmers will embrace a business approach within which activities to add value to the raw material thrive and generate growth, employment and additional revenues for cocoa stakeholders on the African continent”.

There is a huge potential to increase value addition in Africa, which would be a source of economic diversification, job-creation, tax revenues and, indirectly, improvement of farmers’ incomes. 

New cocoa and chocolate products made available to African consumers would also lead to increased consumption on the continent, which represents only four percent of global consumption.