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World Bank tackles cocoa corruption

Published: 2:19PM Sunday September 07, 2008

The World Bank has ordered Ivory Coast to tackle "serious corruption" in its lucrative cocoa industry, saying it will not lend money to the country unless it sees better governance of the sector.

Obiageli Ezekwesili, World Bank vice president for the Africa region, said it would be "absolutely unacceptable" to support reducing poverty while the poor were being denied adequate reward for their work.

On Friday, Ezekwesili said Ivory Coast could reach the World Bank's debt relief decision point by the end of the year and then have more than $3 billion (NZD$4.5 billion) of external debt written off by mid-2009, pending an assessment by sister organisation the International Monetary Fund.

Over the next three years, some $800 million (NZD$1.2 billion) of Bretton Woods funding could be available to the world's top cocoa producer, which is struggling to organise elections in November, aimed at ending a crisis sparked by a brief war in 2002-2003.

Cocoa prices are close to 28-year highs, but the Ivorian industry is mired in allegations of mass corruption.

"You have to deal with serious corruption in the sector because that is the only way the economics will add up for the poor people who are the ones creating the wealth but are being unfairly treated by current arrangements," Ezekwesili told Economy and Finance Minister Charles Koffi Diby.

Diby accompanied her on a visit to a cocoa farm at Tanokro, 100 km northwest of the main city, Abidjan, on Saturday.

Numerous senior cocoa officials have been arrested since a June swoop that followed allegations that more than 100 billion CFA francs (NZD$326.6 million) to develop the sector had been stolen.

The country's Coffee and Cocoa Bourse (BCC) is paralysed by a strike over the lack of pay and a leadership struggle following the arrest of the previous administration.

Ezekwesili described governance of the sector as a "totally fundamental benchmark" for the World Bank's programme.

"What it means is that it is a trigger that will have to be satisfied in order for us to be able to support a lot of the other things that the government would seek from us," she added.

Minister grilled

Ivory Coast liberalised its cocoa sector in 2000, ending a system of state-guaranteed prices and setting up a network of agencies meant to promote and regulate the industry.

It is the leadership of many of these organisations that has been accused of corruption and farmers have long called for those administering funds raised from taxes to be replaced.

"All the structures are useless ... they take money from us but nothing happens," said planter Desiree Kouame.

Another farmer, 50-year-old Georgette Kwaku Ahoua, complained that the prices of 300-400 francs per kg she was offered are low in comparison to world prices of close to $3,000 (NZD$4,500) per tonne and, despite 20 years of cocoa farming, she still did not have enough money to buy medicine.

"This is not an acceptable situation ... we have to do something about this sector," Ezekwesili said, visibly shocked by stories of hardship she was told by farmers.

"If the revenues had been properly managed ... we would have not had the situation we have seen today."

"Minister, do you want to make a promise you will look into this? This woman doesn't look 50, she looks 90."

The minister replied: "We must do a little more because when you come and see this level of poverty, it's shocking."

Ivory Coast's government has promised reforms but much of the political focus is on presidential elections, which are meant to reunite a country that has been divided since rebels seized much of the north.