4. The Position of Africa in the World Economy

Given the current problems and their causes, it makes sense to put the plight of the cocoa farmer in a larger perspective. The following figures come from Creating Prosperity in Africa (Nyambal, 2006.)

Africa has 13% of the world’s population but only 1% of the foreign direct investment. In 1960, Africa’s share of world-wide exports was 3.6%; today, it is 1.7%.

There have been comparatively few efforts to enter the value chain. For example, Africa continues to export raw materials over processed materials. Even the raw materials would benefit from a campaign to add value by creating a market. For example, Cadbury, which is so active in Ghana, could center their marketing efforts around the Ghanaian bean.

There is comparatively little research and development done in Africa. There are 83 engineers per million inhabitants in sub-Saharan Africa compared to 783 per million in Asia and 1,102 engineers per million in developed countries. Another measure—patents applied for: in 2002, 190 patents were applied for in sub-Saharan countries vs 40,569 in East Asia.

Investment in development lags far behind. In 1998, $7 billion were invested in sub-Saharan Africa compared to $151 billion in East Asia and $36.5 billion in Latin America. The vast majority of the directly invested funds in Africa were allocated to oil and minerals.

Sub-Saharan Africa is structurally not conducive to investment. Legal and judicial institutions are not dependable. It is difficult to even obtain a court decision within a reasonable time period. For example, it takes 525 days to enforce a contract in Côte d’Ivoire vs. 75 days in France. If you want to export something, it takes on average 48.1 days to comply with all procedures compared to 25.8 days in East Asia.

Finally, as so many point out, African governments are often paternalistic and favoring of one ethnicity over another as well as racially motivated. This makes it difficult for women to do business, for a Northern Ivorian to start a business in Abidjan, and for a white African to compete in a market that favors black Africans (and not too long ago, it was the reverse.)