Items of Interest: June 13

The electoral politics of Côte d’Ivoire and Ghana cocoa bean price coordination, the Democratic Republic of the Congo joining the East African Community and Tanzania offering to extend the standard gauge railway there, and the Tanzanian government’s budget prioritization of a redundant and geostrategically independent supply chain infrastructure are actions from June 13 that may emerge to become significant factors impacting geomarket developments in Africa.

Côte d’Ivoire, Ghana: Government representatives as well as cocoa industry buyers will meet in Abidjan on July 3 for technical talks to implement a floor price of $2,600 per tonne for the supply of cocoa beans in the 2020 harvest season.

Significance: The agreement between the cocoa regulating bodies of the governments of Côte d’Ivoire and Ghana to coordinate and achieve a floor price for cocoa bean production has achieved a tentative success in raising the price for the future harvest by almost 25% from the approximately $2,100 per tonne currently paid. The cartel-type coordination brings an additional geostrategic benefit to the Ouattara administration in Côte d’Ivoire as well: the agreement to coordinate for the 2020 harvest season, which generally opens in the month of October, is also the month the country holds its next presidential election. Ouattara, in his second term as Ivoirian president, has not ruled out seeking a third term, and has said he will announce his decision sometime in 2020. Emerging political alliances in Côte d’Ivoire paint an election scenario favoring the incumbent’s opposition, who are attempting to create an alliance whose ethnopolitical bases also roughly align with the country’s major cocoa growing regions (the southwestern and southeastern regions of the country). With approximately 600,000 cocoa farmers and 6 million people working in the Ivoirian cocoa industry, dividing this constituency and enticing them with improved socioeconomic livelihoods to vote pro-government may be the Ouattara-led government’s means to offset an otherwise discouraging electoral outlook.   

Democratic Republic of the Congo, Tanzania: President Félix Tshisekedi reiterated his government’s formal request to join the East African Community to which Tanzanian President John Magufuli welcomed and stated his country’s standard gauge railway project could be extended to the Congo. 

Significance: Tshisekedi is on a two-day official visit to Tanzania, his first visit to the country since becoming Congo president in January. The Congo becoming a member of the East African regional bloc would harmonize cross-border trade integration, could be fast-tracked when the bloc convenes a head of state summit on November 30. The governments of the Congo and Tanzania both hold an interest in establishing robust and reliable supply chain connectivity between the Indian Ocean basin and the Great Lakes region of central Africa, and should the Congo become a partner of Tanzania’s standard gauge railway project, like Rwanda has done, it would consolidate Tanzania as a primary corridor between the two global marketplaces. The Tshisekedi administration has held similar discussions with the governments of Kenya and Uganda to become part of the Kenya-led standard gauge railway project that is intended to link the Great Lakes region to the Kenyan port of Mombasa. Absent funding to extend the Kenyan railway to Uganda undermines the effectiveness of the northern corridor, however.   

Tanzania: Parliament is to vote on the government’s 2019/20 budget that calls for spending of 33 trillion Tanzanian shillings, or roughly $14.6 billion.

Significance: The Magufuli administration is prioritizing a significant amount of money toward infrastructure development projects of strategic significance, to include the country’s standard gauge railway and the Stiegler’s Gorge hydroelectric power project, that will equip the country with a redundant supply chain capability independent of corridors or connectivity through neighboring countries. Absent from the proposed budget is funding for the country’s greenfield Bagamoyo port project, which the Tanzanian president has recently criticized for the excessively burdensome financial requirements the project’s Chinese backers have demanded.

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