The African Development Bank (AfDB) says it is willing to provide 1.2 billion dollars to finance plans by Cote d’ Ivoire and Ghana to process more of their cocoa.
The plan will be under a joint initiative to guarantee stable revenues from the commodity, the continental lender said.
Part of the loan will finance the construction of modern storage facilities, farm rehabilitation and disease control.
It will also include payment of compensations to owners of cocoa trees ravaged by swollen-shoot viral disease, AfDB President Akinwumi Adesina, said in Accra.
“We’ve received a request from both governments to support them in those particular areas. We’ll be looking at what we and others can do…. to the tune of 1.2 billion dollars,” Adesina told media after a meeting with Ghanaian officials in Accra.
Ghana and Cote d’ Ivoire, which account for around 60 per cent of the world cocoa supply, signed a document in June.
The document is meant to enhance collaboration between their regulatory and marketing departments with a common interest to counter price volatility.
“I’ve never seen a situation anywhere in the world where anyone who produces 75 per cent of a commodity is just a price taker… this must change and it’s about how smart you interface the global market,” Adesina said.
The two countries have been hit hard this year as cocoa futures have fallen by around a third since last year forcing Cote d’ Ivoire to slash the price it guarantees for farmers by 36 per cent to 700 CFA francs (1.14 dollars) per kilo late March.