Feasibility study and design of an impact bond to reduce child labour in Côte d’Ivoire

Background

The ILO estimates that 160 million children were engaged in child labour on any given day in 2020. The situation is concerning in Côte d'Ivoire, the world’s largest cocoa producer. Its Ministry of Planning and Development estimated in 2016 that around 3 million children are used as labour in rural cocoa-producing areas of the country.

To address the issue of child labour, the government of Côte d’Ivoire adopted a National Action Plan 2019-2023. Many other initiatives have been launched by NGOs and development actors to improve children’s rights. Despite these initiatives, progress in combating child labour in cocoa production remains modest. New approaches are needed to accelerate and scale up efforts to eliminate child labour in the country.

Purpose

As part of the ACCEL AFRICA project, the ILO is exploring a potential new financing instrument, the impact bond. The purpose of the impact bond is to attract private financing and identify new actors from the financial sector to contribute to the elimination of child labour in the cocoa value chain in Côte d’Ivoire.

The following activities are planned as part of this initiative:

1. Feasibility study
2. Design of an impact bond

First phase: Feasibility study

The first phase explored whether an impact bond can be employed to reduce the incidence of child labour in cocoa supply chains in Côte d’Ivoire. This study included:

• Understanding and mapping the local socio-economic context and root causes of child labour.
• Gathering data, costs, and evidence from more than 100 interventions aimed at reducing child labour.
• Assessing innovation models to improve effectiveness and efficiency of the interventions.
• Identifying local and international partners, including supply chain actors.
• Selecting preliminary outcome metrics.

The feasibility study, concluded in 2021, identified school feeding programmes as a suitable intervention for an impact bond to address child labour in Cote d'Ivoire. An approval workshop with ILO constituents in Abidjan paved the way for the second phase.

Second phase: Design of an impact bond

The design phase for the impact bond started in August 2022. The objective of this phase is to further refine the intervention model and the impact bond structure. The design phase will conclude in 2023. Some key features of this phase include:

• Selecting service providers to implement the intervention model.
• Identifying institutions to participate as potential outcome funders and impact investors.
• Engaging stakeholders (ILO constituents, local government agencies, service provides, potential funders and investors) to ensure understanding of the intervention objectives and alignment of activities.
• Finalizing the impact measurement methods and impact evaluation strategies.
• Involving the government to ensure institutional buy-in and sustainability of the intervention after the end of the impact bond.