Restoring & Maximizing Opportunities in Nigeria Cocoa Value Chain

Cocoa production is important to the economy of Nigeria. The commodity is the leading agricultural export of the country and Nigeria is currently the world's fourth largest producer of Cocoa, after Ivory Coast, Indonesia and Ghana and the third largest exporter, after Ivory Coast and Ghana. The crop was a major foreign exchange earner for Nigeria in the 1950s and 1960s and in 1970 the country was the second largest producer in the world but following investments in the oil sector in the 1970s and 1980s, Nigeria's share of world output declined.

The Nigerian Cocoa industry was liberated in 1986, when the government abolished the Nigerian cocoa broad, a government bureau that controlled the marketing of cocoa, and deregulated the industry. The declined continued, however, so to rehabilitate the industry, in 1999 the government set up the National cocoa development committee (NCDC). The NCDC promotes cocoa production and trade in cooperation with the various growers agencies operating in the industry, while the cocoa Association of Nigeria (CAN), the Cocoa Farmers Association of Nigeria (CFAN) and the Cocoa Growers Association of Nigeria (COGAN).

The Cocoa Research Institute of Nigeria (CRIN) is another major stakeholder in the sector established in 1964 as a government parastatal, the institute conducts research on training growers in modern development skills.

Cocoa trees respond well in regions with high temperature and distributed rainfall. In Nigeria, the cocoa tree is grown from seedlings which are raised in nurseries, when the seedlings reach a height of 3 cm they are transplanted at a distance of 3 to 4 meters. The cultivation of cocoa is done by many small scale farmers on farmlands of around 2 hectares while export is dominated by a few firms.

Fourteen of Nigeria’s 36 states grow cocoa: Abia, Adamawa, Akwa Ibom, Cross River, Delta, Edo, Kogi, Kwara, Ogun Ondo, Osun, Oyo and Taraba States.

According to statistics, global Cocoa market is estimated to worth $2.1 billion and Chocolate market $131.7 billion by the year 2019. However, Nigeria is losing its global ranking, due to poor production practices and non-compliance to Importing Countries’ Requirements among others. As at 2015, while Cote D’Ivore and Ghana boast of production level of about 1.7 million metric tons and 800,000 metric tons, respectively, Nigeria’s production still hovers around 220,000 to 250,000 metric tons, yearly.

In a bid to revive the sector, Cocoa is now one of the 13 National Strategic Export Products (NSEP) of the Federal Government of Nigeria and very prominent in the NEPC’s Zero Oil Plan initiative. The commodity has now been integrated into Government’s Economic Recovery and Growth Plan (ERGP), 2017-2020. Presently, cocoa is the leading major agricultural export of Nigeria.

Following are some other factors limiting cocoa production in the country:

·        Many Cocoa farmers are aged and young people who are interested lack resources and technical know-how

·        Most Cocoa trees are currently unproductive, old and diseased infected.

·        Poor level of Modern system of farming, processing and packaging that meets international market

·        Inadequate supply and high cost of recommended chemicals.

·        Shortage and high cost of farm labour with little mechanization

·        Non-availability and low utilization of fertilizers despite declining soil fertility.

·        The duration of the dry months is getting longer with climate change and it is affecting crop yield and the establishment rate of new planting.

·        Poor access roads to the major cocoa production points

Recommended Solutions to revive Nigerian Cocoa Industry

·        Nigeria needs stronger collaboration and research to increase its cocoa production as well as improve its quality to conform to global market requirements.

·        There is the need to address the issue of low quality and poor packaging in order to have access to cocoa import markets. This calls for capacity building for actors in the Cocoa value chain on best practice is production, processing, packaging, export standard and compliance

·        Young people should be mobilized and enticed to venture into various aspect of Cocoa value chain.

·        Infrastructure that will boost value addition should be promoted

·        Provision of inputs and climate smart technologies in Cocoa value chain are important to restore the glory of Nigerian Cocoa Industry

Cocoa production and trade in Nigeria are completely liberalized. Grower prices are determined by movements in the international prices for cocoa and fluctuations in the exchange rate of the naira record high international prices for cocoa and fluctuations in the exchange rate of the naira. Record high international prices for cocoa have triggered an upward spiral in grower prices by more than 50% over the last 5 years from 300, 000 naira per MT in 2015 to 460,000 naira per MT in mid-2011, and now hovers around 550,000 naira per MT.

There is a huge demand for cocoa worldwide and continue to grow with the resultant effect of approximately supply.

AREMU Fakunle John is a Public and Private Sector Development Specialist (Agribusiness, Value Chain, International Trade, Innovations, and Market System & Advocacy). He has more than 7 years’ experience working with public, private and development agencies in African Agribusiness. He is the President & Lead Consultant to Cedro Royal Multiventures- an Agribusiness and Commodity Trading Consortium based in Abuja, Nigeria. He can be reached on [email protected] and whatsapp: +2348063284833