Emphasizing the importance of manufacturing, Kate Douglas writes in HowWeMadeIt:
More hereThe example of the chocolate bar To give an idea of how little value is being captured by exporting raw commodities, that are manufactured elsewhere and then imported back into Africa, George used the example of a typical chocolate bar.
*Image by Ecobank, 2014
“Back in the 1970s when cocoa prices were very high, cocoa accounted for up to 50% of the value of a chocolate bar. By 1980, this had fallen to up to 16%. The most recent estimates put it at between 6% and 7%… The truth is that if you have a 24 segment bar of chocolate, farmers get little more than one chunk of the bar.”
He added that the vast majority of profit from a sale of a chocolate bar is captured by the chocolate manufacturer, estimated at 70%.
“There is only so much value you can get out of a raw cocoa bean. It is when you turn it into something else that the value really is there. So it is my view that – whether it be for oil, for minerals or for soft commodities – Africa should not just focus on producing export volumes and inter-regional trade but it should also focus on extracting more value from its commodities before they leave port,” concluded Edward George(head of soft commodities research at Ecobank,).
