Côte d’Ivoire adds value to agriculture with local processing

Beyond raw materials export, local processing is the key goal of the national authorities, with a target of having 50% of produce processed in-country by 2020. However, there are a number of challenges hindering the achievement of this goal.

Cocoa

Cocoa is an integral commodity and was an essential part of the country’s early development. Côte d’Ivoire is the world’s most important cocoa producer, yet it remains vulnerable to price volatilities, as less than 10% of processing is currently done locally. Efforts to capitalise on this crop by expanding local processing have been undertaken by the authorities as part of the National Agricultural Investment Programme ( Programme National d’Investissement Agricole, PNIA). It is hoped that this would not only benefit the exports market but also provide local jobs; the World Bank has stated that chocolate manufacturing could create significant employment opportunities.

“Côte d’Ivoire’s ambition is to process 900,000 tonnes, or 50% of its cocoa production, by 2020. To do this, the Ivorian government has developed an industrial policy that focuses on strengthening the production-processing link of all our raw materials, especially cocoa and cashew nuts,” Prime Minister Amadou Gon Coulibaly told local media in May 2018.

However, major investment is needed for the segment to add more value via modernised operations, which would require the assistance of international financial institutions. There have already been some notable successes in this regard, such as French group Cemoi, an international cocoa processor, opening a chocolate factory with an annual capacity of 10,000 tonnes in 2015 in the Yopougon Industrial Zone in Abidjan. That year also saw Singapore-based Olam open a primary cocoa-processing facility with a 70,000-tonne capacity in San Pedro (see Industry & Retail chapter).

Cashew

Similarly, cashew nuts – another commodity for which Côte d’Ivoire is a top world producer – is mostly processed overseas, despite rising demand and high levels of consumption in the US and EU, and the general price increase over the past decade. The government is pushing to increase processing to 300,000 tonnes per year, aiming to reach 100% by 2020, with a support programme launched in 2016. In addition, the authorities introduced tax breaks and bonus payments of CFA400 (€0.60) per kg to further incentivise processing in the country. Côte d’Ivoire has managed to attract investment from important local and international players such as Société Ivoirienne de Traitement d’Anacarde and Olam, which should help the country to compete with India and Vietnam for processing.

The national regulator for the segment, the Regulatory Authority for Cotton and Cashew, provides credit guarantees for the modernisation and purchase of processing equipment. Moving forward, the government still needs to tackle high energy and logistical costs, as well as the lack of qualified workers and necessary equipment, all of which are common constraints outlined by industrialists and processors.

Cotton

The authorities are aiming to have 25% of the country’s cotton processed domestically by 2020. “While the industrial zones are promising, the sector still requires modernisation,” Siontiamma Jean-Baptiste Silué, secretary-general of Intercoton, the cotton industry’s lobbying union organisation, told OBG. “Furthermore, we need to address financing and insurance for producers and processors, and facilitate the equilibrium price mechanism we set up by having a state-sponsored fund dedicated to cotton,” he added.

Although the cotton segment has been allocated funding under the PNIA, the authorities are also working to attract significant inflows of foreign direct investment from key international players, as well as agro-industrialists with expertise in agricultural processing. Moreover, some stakeholders believe that existing government measures, such as bonus payments and tax incentives, require expanding to address the high costs incurred by agricultural processing.