Ivory Coast Sets Its Sights on Becoming a Startup Hub
WHY YOU SHOULD CARE
Because no addiction is good — not even if it seems to be propelling your economy.
By Adrian Brune
Cocoa is a double-edged sword of a crop. Confectioners turn it into delicious treats or use it — in a more distilled form — for antioxidants that impart anti-aging properties, lower blood pressure and improve cardiovascular health. It has long propelled Ivory Coast’s economy. But the crop also guzzles water, demands shade and is responsible for large-scale deforestation. Now, Africa’s second-fastest-growing economy is looking to drag itself away from its cocoa addiction — before the lows spiral out of control.
To diversify, the country is looking to turn itself into a start-up hub. Ivory Coast’s national distance learning center has joined with telecom giant Orange — which controls a quarter of the country’s mobile phone market — to increase access to vocational education and mid-career training. Under a newly inked partnership, they provide coursework from French-speaking online and African universities for smartphone downloads. Also, companies such as dairy firm Bel are working with Orange to track the informal distribution routes of street traders and farmers so that customers come to them — instead of them chasing traders.
Finally, because poverty leaves farmers vulnerable to pressure from traders to encroach on more and more forest land, groups like the Voice Network (Voice of Organisations in Cocoa in Europe) are lobbying government, industry and other social organizations to increase the share of profits Ivorian farmers receive — up from between 3.5 and 6 percent. In early 2018, the governments of Ivory Coast and Ghana committed to an industry-backed Cocoa & Forests Initiative, promising to mitigate further damage to forests and to ensure fairer deals for farmers.
If Côte d’Ivoire is going to increase its diversification, this effort will have to be accompanied by a reform of its system of education and learning.
Pierre Laporte, World Bank
And the World Bank is working to keep cocoa production buzzing, while also helping Ivory Coast diversify its economy — with education as a key driver. In December 2017, the World Bank approved an International Development Association credit of $125 million toward hiring teachers for underperforming children, in addition to $205 million for girls’ empowerment.
“If Côte d’Ivoire is going to increase its diversification, this effort will have to be accompanied by a reform of its system of education and learning,” says Pierre Laporte, the World Bank’s country director for the Ivory Coast. “It takes skills to produce more and better, and these are usually acquired during the years of school and training.”
This mishmash of strategies may appear uncoordinated, even chaotic, but these initiatives are all rooted in Ivory Coast’s cocoa-driven economic success — and ironically, the vulnerabilities that dependence has spawned. From 2010 to 2015, the country’s exports increased at an annual rate of 2 percent, led by cocoa beans. This helped companies such as Swiss-based Nestlé create cooking chocolate, and German-based Nivea make its signature skin cream — all contributing $2.5 billion to the Ivorian economy, or 29.4 percent of total exports. With a GDP growth rate of around 8 percent since 2012, Ivory Coast is behind only Ethiopia in Africa.
But the country is also increasingly suffering from adverse environmental and social impacts that too come with a cocoa addiction. Over the past decade, cocoa farming has destroyed around 2.1 million hectares of land in the country — at least a third of which is illegal. Traders selling to the world’s largest companies have prompted eager farmers to plant cocoa inside protected land, reducing Ivory Coast’s rainforest cover by more than 80 percent since 1960. The illegal beans are often mixed with the “clean” cocoa beans, creating not only overproduction, but also fluctuating prices that return to haunt farmers. “The problem of deforestation cannot be solved without tackling the underlying crisis of farmer poverty,” says Antonie Fountain, managing director of the Voice Network. Farmers should receive 16 percent of the profit share, says Fountain, to alleviate extreme poverty within the community.
Efforts at improving the lives of cocoa farmers, and respecting their rights, are beginning to pay off — at least on paper — with the governments of the region’s cocoa-producing giants, Ivory Coast and Ghana, signing on to the Cocoa & Forests Initiative. It wasn’t easy to get everyone on board, says Richard Scobey, the president of the World Cocoa Foundation. But a new start has been made. “We established mutual trust and embraced the key principle of shared responsibility for past actions and future solutions,” he says.
For sure, challenges persist. The country is still recovering from a fiscal hangover due to extra-budgetary spending from 1993 to 2002. The World Bank has also recommended that the government monitor arrangements reached with mutinous soldiers and striking civil servants to ensure that there are no new conflicts or flare-ups of civic unrest — the country has suffered two civil wars already, just in this century. The upcoming elections in 2020 could prove a source of instability.
Still, the rapid increase in Ivory Coast’s GDP offers hope, and the country now dreams of transforming into a middle-income country by 2020. In addition to keeping cocoa production buzzing, the World Bank has committed to doubling its support over the next four years to nearly $5 billion — with other donor countries chipping in $15.4 billion in grants and loans — to make that upward mobility happen.
Getting there won’t be easy. But making its cocoa addiction less harmful is the first step for Ivory Coast to develop a truly sustainable economy. And the West African nation, assisted by partners, may just be on its way.
- Adrian Brune, OZY Author Contact Adrian Brune