258 Rebuilding West Africa’s food potential
Figure 1. Monthly International Cocoa and Cotton Prices, 1970-2011Source: IMF, International Financial Statistics, 20122.2 Structural adjustment and privatizationAfter independence was achieved, parastatal marketing boards were created using structures similar to
colonial institutions for marketing of both cocoa and cotton (Bassett, 1988). These institutions differed
somewhat by crop and colonial heritage. In the case of West African cocoa, British colonies (e.g. Ghana
and Nigeria) utilized state enterprises to physically market the commodity, whereas French colonies
(Cameroon, Côte d’Ivoire) heavily regulated private entities. In the case of cotton, publicly-owned gins
transformed seed cotton to lint in an institutional framework similar to that found for cocoa in British
colonies; this was true even in French West Africa (Abbott, 2008; Baffes, 2008). Structural adjustment
programs fostered by the IMF and the World Bank have driven reforms of these institutions. A key
aspect of those reforms was privatization of the parastatal boards, which were viewed as inefficient,
high cost firms. The parastatal boards were pursuing broad development goals, and not just marketing
of cocoa or cotton. They employed more people than private firms, and incurred high costs in stabilizing
prices as world prices for these commodities fell. Public funding and loans from the IMF were necessary
in several cases to keep these parastatals from going bankrupt.Private marketing entities have only gradually replaced public institutions in West Africa, and
privatization has proceeded more slowly, particularly for cotton, relative to reforms elsewhere in Africa.
While pressure for structural adjustment reform began in the mid-1980s, devaluation of the CFA
franc in 1994 represented a turning point in privatization of commodity parastatals in French West
Africa. Nevertheless, actual reforms have occurred only gradually since that time. Domestic marketing
institutions have been liberalized ahead of exporting or processing entities. Once commitment to
privatization began, phased liberalization sought to reform marketing institutions with considerable
uncertainty as to the form those institutions should take. There was concern that liberalization efforts
undertaken earlier in many African countries had not made appropriate institutional reforms and
markets had suffered afterwards. There were not many good examples to follow, however.01002003004005001970 1975 1980 1985 1990 1995 2000 2005 2010Cocoa ICCO Co on A index Food