Why don’t Africa’s resource exporters collaborate?

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Ghana and Côte d’Ivoire, the world’s two biggest cocoa producers, are looking to introduce a production ceiling for the crop to avoid oversupply and support price stability.

The move is part of efforts to promote Opec-like collaboration on production on marketing activities between the two countries – which account for more than 60% of global cocoa supplies. First announced in 2017 this has also seen them introduce a $400 ‘living income differential’ (LID) per tonne for the 2020/21 season to raise farmer incomes.

The goal is to reduce their exposure to global price volatility and boost sector development.

It’s a rare example of collaboration between African resource producers. From hydrocarbons and minerals, to agricultural commodities like cocoa, the continent is an important global supplier of natural resources.

It’s also heavily dependent on such exports. In 2017 sub-Saharan Africa’s top five exports were oil, gold, diamonds, coal and natural gas.

Yet countries usually go it alone, underutilising their position as commodity suppliers, and undermining their already negligible say over things like global prices.

More collaboration obviously doesn’t automatically mean more influence. Ghana and Côte d’Ivoire face numerous obstacles, and it’s worth noting that the production cap is linked to fears that the LID could trigger overproduction.

That said, it’s hard to see a major downside to better coordination between Africa’s resource exporters.

This report reflects the views of the author alone, not those of How we made it in Africa.


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