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Ivory Coast and Ghana to build storage facilities for cocoa?
E. Ablorh-Odjidja
June 23, 2017

The above question is triggered by a June 21, 2017 byline in the Business Day publication of Ghana. It said, “Ivory Coast and Ghana in talks for $1.2bn loan for cocoa output”.

The article continued, “Ivory Coast and Ghana want to build storage facilities for local processing and for the storing and release of stocks based on market demand.”

Brilliant idea, but surprising enough to make one's blood boil. The reason?  The storage part, an astounding idea that has been around since the 60s and about 50 years late!

The time it took for the leaders in Ghana and the Ivory Coast to embrace the concept should be the worry.

 

Consider this:  It took Ghana and the Ivory Coast about 50 years to acknowledge the economic necessity of building silos, yet a short two years to embrace the EPA, a supposed economic growth accelerator!

However, with the storage deal, we are now about to learn that good ideas don't come in partisan colors. And that they could not be encapsulated in the vacuum of time either.

First, let's credit Nkrumah with the idea of building the silos.  He had the idea to control surplus cocoa stock long before the EPA partnership idea was hatched.

 

The ink is yet to dry on the signatory document of the EPA “stepping stone” agreement, just as the proposal for storage facilities came on line.

 

Both the silos and the EPA are being touted as urgent and essential for the growth of the economies of Ghana and the Ivory Coast.

But the two ideas cannot have the same potency of outcomes.  One ought to be better, when stacked for priority.  

The EPA plan, dubbed as the “stepping stone partnership” plan for mutual growth, is nothing of the sort.

 

It is the same warmed over access to European markets we had under colonial rule; in a game of shifting strategies.

 

The irony here is in the repeated failure of the leaders of African countries to see the trap and to speak against it.  This reticence may hurt Africa.

 

But we should know why.  The interest of our former colonial masters and African greed have always been the blockage.

 

Few leaders now seem eager to confront Europe; to challenge her by juxtaposing the self-inspired idea of building silos for development versus one for a package deal asking you to surrender your local market to the foreign, former colonial masters.

But the juxtaposing has to be done. 

 

Within the context of true development, the "stepping stone" plan is the least optimum approach to true independence and development.

Under colonialism, the purpose was to tie Africa's raw materials to the economies of Europe. The EPA, thus, is no different.

 

How do you jump from one dependency under colonialism to a dependency under the EPA?

 

Or, how else could these African leaders afford to think that they could be the primary beneficiaries under another European arrangement?

 

You do so only when you have forgotten or ceased to respond to the former experiences under colonialism. 

These African leaders must be reminded that we struggled for independence, not for a string to attach our countries to market theories from Europe.

Fortunately, the proposal for silos is underway.  The effort is timely, even if late, and one that if accomplished could return tangible profits within the immediate future.

We can even hope at this stage that on completion, the silos would return more benefits within 5 years than the “stepping stone” agreement could for Ghana and the Ivory Coast in the next 25 years.

As said, Ghana had her silos before 1966 and for the same reasons proposed under this new one.

The towering silos on the skyline of the Tema Harbor area are witnesses to the idea.

They are still standing.  They were probably never used, maintained or even subsequently improved after the coup of 1966.  But never mind.  The notion of cocoa stock storage was established, but promptly buried after Nkrumah.

Had the concept taken hold some 50 years ago, Ghana and the Ivory Coast would have been in a better place now; and definitely not as "price takers" for the same cocoa they produce today.

 

They would also have been far advanced on the path to true independence and local and regional economic growth.
 
And the best part is, they would be far removed from mercenary threats by the EPA; the measure for the true "independence" spirit.

But let us move on to the Business Day article.

It said “The cocoa regulators of the world’s two biggest producers (Ghana and Ivory Coast) are in talks with the African Development Bank about a $1.2bn loan that will be used to...mitigate against volatile prices...”

This is where you get angry, if you happened to be an African nationalist.

Because of political ill-will, a good idea has been allowed to go to waste; or no discernible efforts have been made to resuscitate these silos at Tema.

The Daily Graphics of Ghana, about a year ago,   published an article about the matter.

“The silos with a potential storage capacity of 200,000 tonnes were built at a cost of 8.5 million British pounds. Ghana was the world’s leading producer of cocoa at the time, producing more than 40 per cent of the world’s annual output of cocoa.

“The plan to build the silos was, however, severely criticised by the political opposition, the World Bank and other foreign interests.... The eventual abandonment of the £8.5 million silos is best understood in the context of the general opposition to the national industrialisation programme Nkrumah embarked upon shortly after independence. ”

The above, written by George Sydney Abugri for the Daily Graphic, March 10, 2016, cannot be overstated. 

Today, both the Ivory Coast and Ghana have come to the sensible conclusion that “they will work together to derive more value from growing beans after a slump in prices cut government revenue and incomes for hundreds of thousands of small-scale farmers,” according to Business Day.

What took these two countries so long?

The knowledge that we have been "price takers," for our own produce, has always been known since the beginning of the colonial era.  And, it was this same knowledge that helped Nkrumah to encourage the building of the silos in Ghana in the 60s.

Back then, Ghana was the number one cocoa producer and Ivory Coast was second. Nkrumah's proposal for the silos was made long before OPEC became a household name.

Nkrumah knew that the faster we exported our cocoa stock to the world market, the lesser the price we received for our efforts. Hence the need to control supply to the same market.

It was also understood at the time that the facility at Tema could be extended for use by other West African countries. And with their cooperation and understanding, perhaps, more silos could have been built.

The lesson from that era was Nkrumah had no support for the idea.

Houphouet-Boigny , the then President of Ivory Coast secretly undermined Nkrumah's effort. And so did the political opposition in Ghana at the time.

No wonder there was a steep fall n cocoa price in the years leading to the 1966 coup.

 

The low cocoa price on Ghana, an almost one commodity economy country, led to distress in the economy that caused farmers to smuggle cocoa stock in droves across the border into Ivory Coast for better prices.

For the Ivory Coast, Ghana's misfortune of the 60s was a blessing.  The smuggling helped, in part, to catapult it to the number one cocoa producer status, a position it still maintains today.

But today, things are different.  The ill-effect of lower cocoa pricing is affecting both the Ivory Coast and Ghana.

 

“Ivory Coast, the top grower, had to reduce the price paid to farmers by 36% ….. Ghana lost almost $1bn in export earnings because of lower prices,” according to Business day.

 

This unfortunate condition, however, has produced a sensible collaborative effort between the two countries for proposal of new silos.

Is it necessary now to point out the folly of not building these silos earlier?

If successive regimes in both Ghana and the Ivory Coast have had the political fortitude to build these silos earlier, the two nations would have been spared the pain of indolent leaderships.

Perhaps, a competent and honest economist is needed now to do a postmortem analysis on cost, for the lack of silos as economic assets from 1966 to date.

And another, a generous one, to project possible losses in future revenues, should this same lack of silos persist while these two countries head for the EPA "stepping stone" arrangement.

But it will be a waste of time to even ask for the labor now. The collaborative effort on silo building should be good enough an answer.

Hopefuly, the lesson is learned.

Good ideas are necessary for development. We should now refrain from cannibalizing them.  And for the good of Ghana and the Ivory Coast, let's move on.

 

So what good idea is next?  Well, not more of the EPA type!

 

E. Ablorh-Odjidja, Publisher, www.ghanadot.com, Washington, DC, June 23, 2017
Permission to publish: Please feel free to publish or reproduce, with credits, unedited. If posted at a website, email a copy of the web page to publisher@ghanadot.com . Or don't publish at all.







 

 

 

 

 

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