(Ecofin Agency) - • Cameroon is testing a cocoa auction model that could guide the African Cocoa Exchange.
• The AfCX aims to help producers access financing and set fair prices within the continent.
• Local pricing and trade could reduce reliance on global markets like London and New York.

While Africa already accounts for nearly 70% of the world’s cocoa supply, there have been growing calls over the past few decades for the region to play a bigger role in marketing and price-setting on the global stage. The idea of creating an African Cocoa Exchange (AfCX) has often been discussed in that context, though it remained dormant for years. Now, the project is gaining new momentum with the support of various institutions and governments. In an interview with Ecofin Agency, George Edward, an independent consultant working on financing, traceability, and sustainability for the AfCX, discusses the goals and structure of the initiative.

Ecofin Agency (EA): In April, Cameroon was announced as the host country for a pilot cocoa auction under the African Cocoa Exchange project. What is the goal of this phase, and how will it work?

George Edward: This project is part of a broader effort led by the International Cocoa Organization (ICCO) to establish a regional trading platform called the African Cocoa Exchange (AfCX). The vision is to launch national exchanges in four countries, Côte d’Ivoire, Ghana, Nigeria, and Cameroon, each following its local regulations. These would then feed into a regional platform.

The goal is to give Africa more control over cocoa pricing and boost intra-African trade. This could lead to better prices for producers and easier access to financing. For example, producers could store their cocoa in an AfCX-certified warehouse and receive a receipt that serves as collateral for loans. That alone could reshape how the cocoa sector works across the continent.

In Cameroon, the pilot project focuses on an open auction system. It will test how the warehouse receipt model functions alongside all the documentation and logistics the AfCX requires. The initiative has strong support from Cameroon’s National Cocoa and Coffee Board (ONCC) and the Cocoa and Coffee Interprofessional Council (CICC).

Cocoa for the pilot will be supplied by cooperatives near Douala and sold through an open bidding process. If successful, it could serve as a model for future AfCX operations across other African countries. The hope is to benefit everyone in the chain, producers, cooperatives, and local processors, while ensuring a steady supply for exporters. In the next phase, we plan to roll out similar pilots in the other partner countries.

EA: Why was Cameroon chosen for the pilot instead of Côte d’Ivoire, the world's top cocoa producer?

GE: Cameroon’s cocoa sector is more liberalized than Côte d’Ivoire’s. Local cooperatives there are already familiar with auction-based sales. With support from the ONCC and CICC, Cameroon was simply the best place to start.

We are also planning a pilot in Nigeria, which will focus on warehouse receipt financing (WRF). That project is in partnership with AFEX Commodities Exchange, Nigeria’s first private agricultural exchange, which already trades cocoa. As the AfCX project grows, we intend to run pilots in all four major producing countries to refine the model.

EA: What new tools or approaches are being tested in this pilot?

GE: The main innovation is warehouse receipt financing. In West Africa, some banks already offer stock-based financing, but only to large exporters or multinationals like Cargill or Barry Callebaut. Small and mid-sized players rarely get that kind of support.

With WRF, any actor, farmer, co-op, or processor, can store their cocoa in an AfCX-approved warehouse, get a receipt, and use it to secure a loan. That is a game changer. It has never been tested at this scale in Africa before. The Nigerian pilot will focus on WRF, while the Cameroon pilot will focus more on auction mechanisms. Together, these efforts aim to show how producers can bypass middlemen and access financing directly through the AfCX.

EA: Global traders like Barry Callebaut and Olam currently dominate cocoa trading in West Africa. How could auctions affect their role?

GE: Overall, major trading firms support the AfCX because it aligns with their public commitment to improving farmer livelihoods. They benefit when cocoa communities are stable and resilient. So, they have every reason to back initiatives that genuinely help producers.

I believe these firms are both morally and strategically aligned with the project. That said, we will need to see how the new model impacts their supply chains and relationships with producers and cooperatives. We are hopeful that some large players will join the pilot and eventually become regular participants in the AfCX platform.

EA: How will this local exchange reduce Africa’s reliance on the New York and London markets and help farmers earn more?

GE: That is a key aim of the AfCX. Today, the gap between farmgate prices and global market prices is massive. In Côte d’Ivoire and Ghana, farmers earn around €3,000 per ton, while cocoa trades for about €8,000 per ton on global exchanges like London.

That is a huge disconnect. The African producer is very far from the final European buyer. If we can start setting cocoa prices in Africa, producers and co-ops could get a fairer share that reflects the true value of their work.

Local processors would also benefit from the exchange. Right now, many struggle to source cocoa because big traders scoop up most of the available supply. We hope the AfCX will help stabilize prices by anchoring them in the realities of local supply and demand.

Over time, as more producers and traders deposit cocoa in AfCX-certified warehouses, stocks will become more visible. That transparency can ease fears about shortages and reduce the price volatility we have seen in the past three years. But this change will not happen overnight, it is a long-term process.

EA: How will the exchange be regulated and how will its governance represent producers’ interests?

GE: Governance and ownership of the AfCX are still under discussion, but one thing is certain: the exchange will be independent. That is essential for its credibility.

We are working toward a mixed ownership structure, with both public and private investors. The four producing countries will be involved, as well as key partners like the African Export-Import Bank (Afreximbank), which is funding this phase of the project.

The regulatory framework will align with national laws in each country. But harmonizing all that is complex, and ongoing discussions are taking place to ensure the system works across borders.

EA: How far along is the planning? Have any major milestones been reached?

GE: Last year, we completed the pre-feasibility phase, during which we presented the project model at a stakeholder workshop in Ghana. We showed how to build a strong network with a central hub and well-connected actors. That session helped us secure broad approval to move forward.

We are now in the full feasibility study phase. This includes field research in the four countries, consultations with regulators, producers, processors, and traders, and the design of a comprehensive model for the AfCX. We hope to present that final model later this year, before moving into the third phase: actual implementation.

EA: What are the main challenges you expect during the pilot?

GE: I see three major challenges. First, regulatory harmonization. Each of the four countries has its own rules for cocoa, so building a common system that works for all is tough and needs detailed consultations.

Second, awareness and education. Many cooperatives still see the idea of a cocoa exchange as abstract. We need to show them, clearly and practically, how it can help them get financing and reduce post-harvest losses. These benefits must be communicated in a simple and relatable way to producers, cooperatives, processors, and regulators.

Third, there is resistance from middlemen who currently dominate the supply chain. But if we can include them in the AfCX model as agents, they can continue earning income by adding value through services and relationships they already manage. It is not about cutting anyone out, but about building a better system for everyone involved.