Ghana, the world’s second-largest cocoa producer, together with other cocoa producing countries on the continent have announced plans to establish an African Cocoa Exchange (AfCX) that will serve as a platform for financing and trading cocoa proceeds. The exchange, which is expected to be operational this year should everything go according to plan aims to enhance Africa’s influence in the cocoa value chain and competitiveness in the cocoa sector.
Members of the International Cocoa Organisation (ICCO) convened in Accra on 21st and 22nd June 2023, for a stakeholder workshop on feasibility studies of establishing an African Cocoa Exchange. Speaking after the first day of the event, the Chief Executive Officer of the Ghana Cocoa Board, Joseph Boahen Aidoo explained the importance of this initiative and how the outcome of the workshop on the feasibility study will help in the establishment of the exchange.
According to him, price of cocoa has always been dictated in the New York and London market which has not been very favorable to producers in Ghana and the Africa continent. He believes that an establishment of a market in either Accra, Lagos or Abidjan, will change price regimes and boost confidence in African traders and producers, to trade properly and have some bargaining power on cocoa pricing in the international market.
The Minister of Food and Agriculture, Bryan Acheampong, who was also present, lauded the initiative and indicated the government’s support to see it work. The minister asserted that the establishment of the exchange will be a new chapter in Africa’s cocoa industry and will present an opportunity to transform the cocoa supply chain for delivery of greater value to all actors.
Ghana has made a move to host the platform and by creating a regional hub for cocoa trading, Ghana hopes to attract more investment and innovation in the sector, as well as improve the livelihoods of cocoa farmers. The exchange will also enable Ghana to have more control over the pricing and premium on its cocoa, which are currently determined by the London and New York markets.
The African Cocoa Exchange is expected to boost the continent’s position in the global cocoa value chain, and have some control over the pricing of the commodity. The exchange will also complement the efforts of the African Continental Free Trade Area (AfCFTA), which aims to create a single market for goods and services across Africa.