August 3, 2017 / 12:17 AM / 3 years ago

African Development Bank to finance Ghana-Ivory Coast cocoa plan

ACCRA, Aug 2 (Reuters) - The African Development Bank (AfDB) is willing to provide $1.2 billion to finance plans by Ivory Coast and Ghana to process more of their cocoa under a joint initiative to guarantee stable revenues from the commodity, the continental lender said on Wednesday.

Part of the loan will finance the construction of modern storage facilities, farm rehabilitation and disease control, including 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 and we’ll be looking at what we and others can do.... to the tune of $1.2 billion,” Adesina told Reuters after a meeting with Ghanaian officials in Accra. Ghana and Ivory Coast, which account for around 60 percent of the world cocoa supply, signed a document in June 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 percent 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 Ivory Coast to slash the price it guarantees for farmers by 36 percent to 700 CFA francs ($1.14) per kilogram in late March.

Reporting by Kwasi Kpodo; Editing by Lisa Shumaker

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