SEYI TAIWO-OGUNTUASE
Stakeholders in the cocoa industry present at the Lagos edition of the International Cocoa and Chocolate Forum have unanimously called for an urgent need for policy formation to encourage value addition.
The forum with the theme; ‘Putting value in cocoa at producing regions’ had in attendance farmers, research institutes, financial institutions, investors, entrepreneurs, government officials among others stakeholders.
The stakeholders stressed that the greater potential that has remained largely unexploited lies in value addition, that much of the nation’s cocoa is exported as raw beans, with limited local processing.
This according to them represents a missed opportunity for higher revenue generation, job creation, poverty alleviation, economic diversification and development.
The stakeholders pointed out that despite Nigeria being the world’s fourth-largest producer of cocoa, lack of processing facilities is a major factor behind its poor performance in the global cocoa market.
Abba Bello, Managing Director and Chief Executive Officer of NEXIM noted that of more significance is the need for Nigeria to add value to its cocoa exports as a major step towards maximizing the benefits of investments in the sector.
He noted that it is instructive to note that the cocoa industry; including beans, cake, and chocolate is worth $200bn annually, out of which the entire West African producing region made up of Cote d’Ivoire, Ghana, Cameron and Nigeria, which account for about 70 to75 percent of the global output earns only $10bn.
While making reference to a report by the International Trade Centre (ITC) in 2021, according to the report, Nigeria produced 208,000 MT of cocoa beans in 2021, but generated a total income of $628m. However, Germany, which did not produce cocoa earned a whopping $57.3bn from export of cocoa products.
“The foregoing underscores the need for all hands to be on deck amongst all stakeholders, including policy makers, researchers, the organized private sector and financial institutions to discuss strategies to crowd in investments and address all the other issues towards achieving the huge potentials in the Nigerian Cocoa industry.
He said over the past five years, NEXIM has emphasized the need to boost value added exports through its PAVE initiative, which means Produce, Add Value and Export.
Babajide Olusola Sanwo-Olu, Lagos state governor while speaking at the conference said that with the current economic challenge, compounded by declining value of our national currency, there is an urgent need for policy formation for value addition.
Sanwo-Olu who was represented by Folashade Ambrose-Medebem, Commissioner for Commerce, Cooperatives, Trade and Investment believes the nation can harness and multiply, in geometric proportion, the current economic benefits it is deriving from cocoa production through a multi-faceted approach.
He said that the state is a trade hub for value addition and with its strategic geographical position and robust infrastructure, Lagos is poised to become a central hub for cocoa processing and trade.
“Without doubt, Lagos is a trade hub for value addition. The state, with its strategic geographical position and robust infrastructure, is poised to become a central hub for cocoa processing and trade. Our ports, coupled with an efficient transportation network, provide an excellent platform for exporting processed cocoa products to Africa and the world.
He stated that by 2026 the state aims to increase local cocoa processing to 40 percent of the nation’s total cocoa production and that it plans to establish at least three major cocoa processing plants in Lagos, each with a capacity to process 10,000 metric tons annually.
The Governor also noted that the state hopes to train and empower over 20,000 cocoa farmers and SMEs by 2025 through various programmes.
“The journey to transforming Nigeria’s cocoa sector into a more value-added and prosperous industry requires collective efforts and strategic partnerships. Lagos State, with its vision and resources, is committed to leading this transformation. Together, we can create a sustainable and prosperous future for the cocoa industry, our economy, and our people,” he said.
The Governor pointed out that there is the need for collaboration with agricultural research institutes to improve cocoa yield and quality, which includes developing disease-resistant and high-yield cocoa varieties for production.
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Senator Ademola Adeleke, Executive Governor of Osun state in his address pointed out that the discovery of oil created serious dislocations within the Nigerian economy.
“We not only abandoned cocoa, palm oil and groundnut economies, we neglected the cash crop sector. The outcome was a major reversal of fortune with successive state governments especially in the South West failing to revive the sector and create a fall back option for the failing oil economy.
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“This assembly will agree with me that at a time Nigeria neglected her cash crop sector for the oil dollar, Ivory Coast and Ghana retained and even updated their cocoa economies. Both nations remain the first and second biggest cocoa producers with an increasingly developed value chain.
“As policy makers, we appear to have paid more lip service than action to diversification campaigns.
Adeleke, who was represented by Tola Faseru, the commissioner for agriculture in the state charged cocoa producing states to introduce innovations towards reviving the cocoa sector; set targets to increase tonnes of cocoa they presently produce; support cocoa farmers and ensure that young farmers enter the sub-sector; collaborate with research institutions such as the Cocoa Research Institute of Nigeria(CRIN) for new cocoa breed and develop value chain addition in term of associated companies for the cocoa sector.
He commended the ongoing efforts of the Western Region Development Initiative (DAWN), a private sector-led initiative to employ a regional framework to revive cocoa production in the country.
He advised each state in the southwest region to build a local revival plan for cocoa that should have a bottom-top approach, saying it is the best strategic approach for the nation and especially the cocoa-producing states.
“To pursue that line, each state needs to consider a standing partnership with the Cocoa Research Institute. This can be complemented by the various researchers in various higher schools in our states. The reality confronting us is the imperative of returning to our old cash crops with deep value additions and processing to finished products.”
Speaking on Osun’s performance in the production of the commodity, he noted that Osun can produce 80,000 metric tonnes annually but is currently producing 22,000 metric tonnes, noting that cocoa remains the major source of earnings for the state as it contributes significantly to the state treasury.
“The graded figure for the year 2023 is 13,000 metric tonnes, with the state earning N108 million. In my administration’s drive to attain the number one position in the community of cocoa-producing states, we are doubling down on the implementation of our agenda.”
Speaking further, the Governor called on the Federal Government to declare an emergency in the cocoa sector by direct federal interventions in terms of financing of revival plans for cocoa producing states.
In the spirit of derivation formula, according to him, the Federal Government should support creation of state marketing boards to fast track the re-development of the cocoa sector at state level; and the federal ministry of agriculture and food security should support the cocoa producing states
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