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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 the storing and release of
stocks based on market demand.”
Brilliant
idea, but a very aged one - surprising enough to make one's
blood boil. The reason?
The storage part is an astounding idea that has been
around since the Nkrumah days.
Why this
late for a potent idea that has been out there for this long?
What took Ghana and Ivory Coast leaders' this long to embrace
this brilliant notion?
Comparatively, it took a short two years for these two nations
to embrace the EPA, a supposed economic growth accelerator plan
advanced by Europe; barely a year-old idea.
Yet some 50 years to acknowledge the economic necessity
of building cocoa silos for themselves!
No matter
how late, the good thing is the lesson the renewal of the
storage notion brings: That good ideas don't come in partisan
colors. And that they should or not ought to be imprisoned
forever in the vacuum of time either.
But
first, some examination of the silo notion to give credit to
where the idea belongs.
It was
Nkrumah who brought the idea and built the first silos at Tema
to control and gain an advantage on surplus cocoa stock; years
before the EPA partnership idea was hatched.
Today the
silos and the EPA are both being touted as urgent growth
accelerators essential for the economies of Ghana and the Ivory
Coast. Curiously,
the ink is yet to dry on the signatory document of the EPA
“stepping stone” agreement, so what gave?
The two
ideas cannot have the same priority and potency of outcomes.
One ought to do better when stacked for primacy.
This EPA
plan promises mutual growth but is nothing of the sort.
It is the same warmed-over promise of access to European
markets that we've had since colonial rule.
It is the same old game of shifting strategies to gain
the upper hand by our former European masters.
It is a trading trap.
Yet,
despite the obvious, the irony is our African leaders refuse to
acknowledge that the EPA is a trap.
But we
know why the reticence.
It is greed.
This is one area that our former colonial masters' interest and
our African leaders' coincide perfectly.
And this is why neo-colonialism is always in play in
Africa.
And few
of our African leaders in the interest of sovereignty and
self-preservation, do recognize the danger and have in feeble
ways confronted Europe on the matters that affect the EPA
agreement. But they
are few and therefore politically weak.
The EPA scheme can only be effectively challenged by a
united Africa.
The
matter of building the silos is different.
It can be successfully executed by only two countries,
namely, Ghana and the Ivory Coast.
The building of the silos can readily strengthen the
economies of these two countries, while at the same preventing
them from signing a packaged EPA deal that in reality asks for a
surrender of African markets to the former colonial masters.
It is the
silos that can lead to the "stepping stone" arrangement that is
falsely implied in the EPA arrangement.
The EPA only ties Africa's raw materials to the economies
of Europe, and a rehashed old colonialism trading
method. Both
old a new approaches institute the same dependency on Europe.
The EPA approach could even be worse.
How
African leaders can hope to win the economic race by placing our
trading capacity under European trade interests must befuddle
the mind.
We
struggled for independence, not for a string to attach our
destinies to the countries of Europe.
And one of the approaches Nkrumah proposed was the silos’
storage to free us from the colonial yoke.
Even if late, the need to
give the notion the impetus it desires is still valid.
Ghana,
under Nkrumah, had the silos built before 1966 and for the same
reasons as proposed under this new Ivory Coast/Ghana notion in
2017.
The silos
still exist as can be attested to by the skyline of the Tema
Harbor area.
These
silos were used, maintained, but promptly
curtailed after the 1966 coup.
And since then have never been used or subsequently improved,
probably, at the instigations of the same European EPA
promoters.
Had the
storage concept taken hold some 50 years ago, Ghana and the
Ivory Coast would not be "price takers" for the same cocoa they
produce today. The
two countries, propelled by the benefits, would have been far
advanced on the path to economic independence and be immune
today from the mercenary threats of the EPA.
But more
attention 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...”
The Daily
Graphics of Ghana published an article written by George Sydney
Abugri on March 10, 2016, about this same matter.
“The
silos with a potential storage capacity of 200,000 tonnes were
built at 8.5 million British pounds. Ghana was the world’s
leading producer of cocoa at the time, producing more than 40
percent of the world’s annual output of cocoa.
“The plan
to build the silos was, however, severely criticized 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.”
This was
economic sabotage with the underdevelopment of Ghana as the object.
The purpose of the outside interference was to freeze
Ghana’s progress.
Sadly, this damage was also largely given support by in-country
political ill-will.
After the
coup, Ghana the premier cocoa producer of the world fell to the
second position with the Ivory Coast as the first.
Either country ever earned any benefit from the new
arrangement. The
faster the cocoa stock was exported from the two countries, the
lesser the price they received from the world's market.
Nkrumah's
silos idea was to control the supply that fed the same market,
to mitigate the fluctuations in price.
The faster other West African cocoa-producing countries
joined in the storage effort the sooner the desired result would
be felt. So these
countries were invited to join the silos storage project.
With the
use of the silos and cooperation successfully in place, more
silos could have been built to support other products.
But
Nkrumah had no support from his fellow leaders in the West
African cocoa-producing countries.
Houphouet-Boigny, the then President of Ivory Coast secretly
undermined Nkrumah's effort. And so, did the political
opposition in Ghana at the time.
To make conditions in Ghana fertile for the coup, there
was a steep fall in cocoa prices.
Ghana
then, and almost one commodity country at the time, felt the
price shock. It
caused distress in the national economy, which triggered farmers
to smuggle cocoa stock out across the border into Ivory Coast
for better prices.
The
smuggling into the Ivory Coast helped, in part, to catapult her
to the number one cocoa producer status, a position she still
maintains today. It
was thought then that Ghana's
misfortune became a blessing for the Ivory Coast.
But
things have changed today.
“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,” wrote Business day.
The
ill-effect of lower cocoa pricing is beginning to bite both the
Ivory Coast and Ghana equally now.
This is the hardship that has produced the understanding
for the building of the Silos.
The two
countries are now willing to “work together to derive more value
from growing beans …” according to Business Day.
Had the
silos been built earlier the economies of the two nations would
have been spared the miserable socio-economic fate unfolding
now.
Perhaps,
a competent and honest economist can do a postmortem analysis to
determine the opportunity cost to the two countries for lacking
the silos as assets dating from 1966 to the present.
And
another on projected damage the EPA "stepping stone" arrangement
will do from now onward if implemented.
Hopefully, the lessons have already been learned.
E.
Ablorh-Odjidja, Publisher, www.ghanadot.com, Washington, DC,
June 23, 2017
Permission to publish: Please feel free to publish or reproduce,
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