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THE recent announcement of a $22 million package to strengthen the cocoa value chain in Nigeria by the United States Department of Agriculture’s ‘Food for Progress’ programme in conjunction with the Lutheran World Relief should come to stakeholders in the country’s cocoa sub-sector as a huge relief. Targeted at substantially raising domestic production, it opens another opportunity for the Federal Government and cocoa-producing states to restore the crop to its pride of place in the economy, diversify revenue sources, create jobs, and boost exports. They should seize it with both hands.
According to the Nigerian Export Promotion Council, the primary objective of the project, which will be implemented over the next five years, is to increase cocoa productivity by leveraging climate-smart agricultural measures, support improved access to inputs, technical resources, capacity, post-harvest processing, and exports.
Nigeria is currently the fourth largest producer of cocoa worldwide, having recently moved from fifth largest, dislodging Ecuador from the former. It accounts for 6.5 per cent share of global production, after Ivory Coast, Indonesia, and Ghana, said NEPC. It is also the third largest exporter, after Ivory Coast and Ghana. The top two combined cultivate more than half of the world’s cocoa.
Confirming Nigeria’s status as the world’s fourth largest producer, WorldAtlas, an online resource, identified the major cocoa-producing states as Ondo, Cross River, Ogun, Akwa Ibom, Ekiti, Delta, Osun, and Oyo. The country realises over $700 million annually from the export of cocoa beans.
Production and exports have witnessed improvements in recent years, but given the country’s immense potential, much more can and should be done to maximise it. A survey conducted in the 1950s cited by German researchers, said up to 200,000 persons were engaged in the cocoa sub-sector in the old Western Region in the 1930s and 1950s.
Nigeria’s climate supports production of beans from October to June. This relatively long cocoa production period facilitates 1.4 million hectares of farmland being cultivated. Seventy per cent of the world’s cocoa beans come from four West African countries namely, Ivory Coast, Ghana, Nigeria, and Cameroon.
A commitment by the Federal Government to increase cocoa production from 340,000 tonnes to 500,000 tonnes yearly by 2024 should be vigorously pursued with active participation by the relevant states. Cocoa was a major agricultural export crop and a foreign exchange earner in the 1950s and 1960s. Nigeria was the world’s second largest producer up till the late 1960s. The oil boom of the 1970s shifted attention away from agriculture.
Thereafter, average annual cocoa production declined from 420,000 tonnes in the 1960s to 170,000 tonnes in 1999, rebounded to 389,272 tonnes between 2000 and 2010, but fell back to 192,000 tonnes in 2015/2016. It was hit by factors such as an ageing workforce, disinterest by younger people in farming, ageing trees without replacement, reliance on older varieties with long periods before producing fruits, climate change effects on cocoa plantations, lack of incentives, difficulty in accessing finance, and other inputs by farmers, and global price volatility.
Nigeria consumes less than five per cent of the cocoa it produces as the citizens have yet to understand its health benefits. Conversely, Western nations consume cocoa products voraciously. Switzerland, Germany, Ireland, the United Kingdom, and Sweden eat the most chocolate, a major derivative of cocoa, according to the International Cocoa Organisation.
Nigeria desperately needs to diversify its revenue sources; and one sure way is to focus attention on the cocoa industry, once the mainstay of the defunct Western Region and whose proceeds funded its development, including the iconic Cocoa House in Ibadan, Nigeria’s first high-rise building, Africa’s first television station, and Liberty Stadium. Cocoa revenue funded its pace-setting free primary education programme, and among the richest people in the region then were cocoa farmers and merchants, whose farms and warehouses are now deserted, no thanks to the shift to crude oil and the erosion of federalism.
Nigeria’s cocoa sector is currently dominated by smallholder farmers numbering between 300,000 and 350,000 with only a few commercial plantations. The cocoa-producing states should partner with and promote private investment in the cocoa value chain. Emphasis should be on processing cocoa into end products and semi-end products, not exporting raw products. Apart from commanding better prices in the international market, this will promote industrialisation, job creation and skills acquisition.
Cocoa beans accounted for just 0.82 per cent of Nigeria’s total merchandise exports of $35.634 billion in 2020, and only 0.4 per cent of the total goods export value in 2019, according to the NEPC. Efforts should be geared towards radically improving this. Partnerships between its federal and state governments, cocoa farmers, international conservation bodies and the private sector is driving a revival of cocoa production through the ‘Agroforestry’ strategy in Brazil, reports the World Cocoa Foundation. Similarly, by encouraging private investment, by 2015, Indonesia had 21 cocoa factories processing between 850,000 tonnes and 945,000 tonnes per year.
Working with various governments, the Central Bank of Nigeria, the NEPC should develop policies to drive the revival of the sector through a well-structured private sector-led approach; it should liaise with research institutes, especially the Cocoa Research Institute of Nigeria, and the IATA, to provide improved seedlings to farmers, and encourage mechanised farming while facilitating the availability of critical farm inputs.
As recommended by the ICCO, Nigeria should invest in disease-resistant seeds to greatly reduce crop losses and embrace best practices in farming techniques.
The government should support private sector-promoted agencies; PwC estimates that only 30 per cent of the cocoa produced is processed into derivatives such as cocoa powder, butter, and paste, with the remaining 70 per cent exported as beans. This should change in favour of manufacturing.
The CBN should help with low-interest credit for cocoa farmers, merchants and processors and exporters. The NEPC and other relevant agencies need to solve the problems of certification and quality of Nigeria’s cocoa export products. Glitches at the seaports must also be fixed.
The central and sub-national governments should not let this opportunity slip away