Ebola-Free Sierra Leone Bets on Cocoa to Spark Recoveryby and
Agriterra resumed cocoa trading in Sierra Leone after Ebola
Government to hand out cocoa seedlings to boost recovery
In July 2014, Adrian Simpson was on a night out in Sierra Leone’s third city of Kenema to celebrate his biggest deal yet: a contract to supply a new business partner with cocoa beans from his company’s plantation.
But as he and the business partners sat drinking beer, an unexpected visitor brought some distressing news.
“We were having a great evening,” said Simpson, managing director of the cocoa unit of London-listed Agriterra Ltd., by phone from London. “Then, an American girl who was studying Ebola wandered over to our table, sat down and said, ‘I think Ebola has arrived.”’
Fast forward to November 2015, and Sierra Leone was declared free from the disease that ultimately claimed almost 3,600 lives in the country, making it one of the hardest-hit by the worst Ebola epidemic yet. The double blow of Ebola and a slump in iron-ore prices devastated the West African nation. While growth is forecast at 0.1 percent this year, the economy contracted 0.25 percent in 2015. Before Ebola began to spread, the government expected growth to reach 14 percent in 2014. Instead, it grew 4.6 percent.
Agriterra’s deal with the business partner didn’t survive the crisis. The company was forced to put its cocoa operations on hold, renting its warehouses in Sierra Leone to aid organizations instead.
But as the memory of Ebola fades, the first signs of economic recovery are showing. Today, Agriterra is getting its cocoa business running again. The company has signed an agreement to sell organic cocoa and shipped its first conventional beans in December, Simpson said.
That fits into a broader strategy to boost output of the bean in one of West Africa’s smallest producers. The government said late last year it aims to distribute 1.3 million seedlings to grow new trees, rehabilitate plantations and increase access to rural finance for cocoa farmers. Meanwhile, state-owned Sierra Leone Produce Marketing Co. is considering selling shares to growers to increase its buying capacity, according to Managing Director Henry Kamara.
“We want to work with the farmers not just at the time of buying; we want the farmers to increase the production and quality of their products,” Kamara said in an interview in Freetown, the capital. The company targets a purchase capacity of more than 1,000 metric tons, from about 100 tons now, he said. It didn’t buy any cocoa in 2014 because of Ebola.
Cocoa for March delivery gained 1 percent to 2,128 pounds ($3,102) a ton by 2:06 p.m. on Friday in London.
Sierra Leone is a tiny cocoa grower compared with the 1.8 million tons harvested in Ivory Coast, the world’s largest producer. Still, farming accounts for 45 percent of the country’s gross domestic product, and the chocolate ingredient “supports the country’s balance of trade and brings in needed foreign exchange,” Kamara said.
Sierra Leone’s cocoa exports dropped to 15,740 tons in the first 10 months of 2015, from 25,780 tons in all of 2014, according to the most recent central bank data. At the peak of the epidemic, the government curbed domestic travel and closed off several rural zones completely. Some cocoa farmers couldn’t find workers to tend their plantations, or fled their farms altogether after witnessing entire families die of the disease.
“At some point, we had 14 road blocks to get through back into Kenema, the streets were semi-deserted,” Simpson said, commenting on the journey from Freetown to Kenema. "It was like being in a science-fiction film."
Agriterra is one of very few companies developing an industrial-sized cocoa plantation in West Africa. Focusing on organic cocoa might be a way for the nation to supply a specialist market and improve the reputation of its beans, which are considered of lower quality and trade at a discount to futures in London, Simpson said.
Agriterra obtained 3,200 hectares (7,907 acres) of land by acquiring a Sierra Leonean cocoa company in 2011, and has planted cocoa on 215 hectares. This year’s crop is “looking good,” Simpson said. The company is now weighing plans for the remainder of its land.