Key figures in Nigeria’s finance and agriculture sectors have revealed a staggering annual loss of $2 billion in the country’s under-utilized cocoa industry.
This disclosure was made at the 2024 International Cocoa and Chocolate Forum, held concurrently at the Transcorp Hilton Hotel in Abuja and the Sheraton Hotel in Victoria Island, Lagos.
The forum, which saw the participation of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and the Minister of Budget and Economic Planning, Senator Abubakar Atiku, highlighted the untapped potential of Nigeria’s cocoa sector.
The event was also attended by various stakeholders within the Nigerian Ministry of Agriculture.
A communiqué jointly signed by HRM Oba Dokun Thompson, Founder of the International Cocoa Diplomacy, Dr. Patrick Adebola, Executive Director of the Cocoa Research Institute of Nigeria, and Mr. Abba Bello, Managing Director of Nexim Bank, underscored the forum’s focus on the challenges and opportunities in the cocoa industry.
The conference provided a platform for policymakers, financial institutions, and stakeholders across the continent to discuss strategies for leveraging the African Continental Free Trade Area (AfCFTA) and other emerging cocoa and chocolate markets.
One of the critical topics addressed was the new European Union Deforestation Regulation, known as EUDR, and its implications for the cocoa industry.
The communique reads, “Chief Olawale Edun, who chaired the programme in Abuja, in his opening address, focused on the future of cocoa and value-add and the role it is expected to play in Nigeria’s emerging and transformational economy, while the remarks of the Honourable Minister of Budget and Economic Planning, His Excellency Senator Abubakar Atiku Bagudu who was the Special Guest of Honour focused on the importance of de-risking agric financing, with the provision of sustainable finance and infrastructure to ensure various sectors of the economy work.
“The keynote speaker and special guest of the Abuja programme was the Honourable Minister of Agriculture and Food Security, Senator Abubakar Kyari who was ably represented by Mr E. Iwara, Director, Crops Protection, delivered his keynote on the subject, Productivity versus Production in Agriculture in relation to Value Creation within the singular market, the African Continental Free Trade Area (AfCFTA).
“Although the country remains the fourth largest producer of cocoa with about 6.5% of the world’s production output and remains the fourth largest exporter with receipts of close to US$700million, the country’s industry has continued to decline even though cocoa can be produced in over 24 states in the country with tremendous potential for growth.
“There are several value chain development opportunities within the global cocoa industry that are not being explored in Nigeria due to a lack of the cocoa culture and full appreciation of the value propositions with the country losing over US$ 2 billion every year.
“The Nigerian Cocoa Industry does not have any form of policy, mapping, identification or data that can help respond to the EUDR or COP28 resolutions and to also plan for social and economic development purposes,” they observed.
“Europe remains the biggest market for West African cocoa and its derivatives but cocoa from the region will be subjected to the new EUDR policy which will come into effect on 1st January 2025 and will possibly disrupt the industry supply chain and the country’s forex earnings from cocoa and other products namely coffee, soya, timber, palm oil, rubber and cattle and their derivatives.
“The different aspect of the Nigerian cocoa supply chain and the smallholder cocoa farmers appear to be unaware of the new EUDR policy and its compliance requirements and remain unprepared as to who is responsible for what.
“There is a lack of proper and creative funding to fully develop the opportunities within the industry. Cocoa Research Institute of Nigeria, CRIN is underfunded and NEXIM Bank is not structured or funded like its counterparts, eg, AFREXIM or EXIM Bank of India, to undertake major investments and financing of necessary and required major infrastructure projects to further the export trade.
“Manufacturing has become unattractive due to the lack of necessary infrastructure to support the services rendered that will make the cost of production and quality competitive with imported products and we need agriculture that must lead into industrialisation.
“N100Billion was set aside for an Agric Development Fund out of the 2024 Agric Budget of N900Billion to support endeavours such as the ICD Forum which had world views because the country will be competing with other countries who may have several policies and subsidy regimes to take advantage of market share and it is important to recalibrate government policies now and again to compensate for gaps and to provide the infrastructure that will ensure various sectors of the economy work.
“There is a need to and it is imperative that cocoa is de-commoditized as the prerequisite to fully achieve value addition and make cocoa a vehicle for inclusive development, wealth and prosperity creation with sustained awareness about the economic value of cocoa and its value chain opportunities
“The country needs to transit from being a cocoa-producing to a consuming one. There must be deliberate consumption of cocoa products as a way to create the cocoa culture being promoted by ICD including cocoa derivatives or cocoa beverages in the existing schools feeding program as this will also encourage domestic and international investments into the sector.”