Can the New Cocoa Board Help Revitalize Nigeria’s Cocoa Industry?

Nigeria’s cocoa industry, once a leading global producer, faces serious declines. The proposed National Cocoa Management Board aims to reverse this trend by coordinating production, providing credit, and promoting local processing. Despite the potential benefits, challenges such as market regulations and competition from other countries could hinder recovery efforts.

Nigeria’s cocoa industry, once a dominant player in the global market, is now struggling, accounting for just 6% of worldwide cocoa production. This significant decline is a result of the 1970s oil boom, which shifted national focus away from agriculture. The establishment of the proposed National Cocoa Management Board (NCMB) could be a pivotal change, offering a chance to reclaim Nigeria’s status and improve livelihoods of those in the cocoa sector, but only if managed effectively.

Historically, cocoa was essential for Nigeria, contributing nearly half of national exports from the 1940s to the 1970s, supported by regional marketing boards. However, military rule introduced inefficiencies through bureaucratic centralization. Farmers have faced numerous challenges since then, including delayed payments, poor infrastructure, and diseases that devastated cocoa production. The discontinuation of the cocoa board in 1986 marked a further decline, leaving farmers vulnerable in a volatile market with little support.

The agriculture minister, Abubakar Kyari, has outlined the NCMB’s mission—not just coordinating production or providing credits but also improving quality, promoting processing, and engaging youth in agriculture. Such ambitions reflect industry desires for robust institutional support. If the board functions well, it could stabilize prices, ensure quality, and encourage local cocoa processing, which suffers under the current model where Nigeria processes less than 10% of its cocoa output.

Economically, Nigeria’s situation is stark; the nation only earns about $750 for each ton of raw cocoa compared to $4,000 for finished products in Europe. A seamless transition towards local production of cocoa-based goods like chocolate could transform the market dynamics, shifting Nigeria from being a price-taker to an influential player. The overall strategy must pivot to developing the local value chain rather than relying predominantly on raw exports, which is fraught with competition from increasingly sophisticated players in other countries.

Recent reports indicate that reviving Nigeria’s cocoa sector will be challenging, especially in light of significant changes in the global cocoa market. While demand is expected to increase in regions like Asia, new regulations, particularly the European Union’s Deforestation Regulation (EUDR), present compliance challenges for local farmers, particularly those who lack resources. The risk of exclusion from the market looms, placing immense pressure on smallholders.

Meanwhile, countries like Ecuador and Brazil are advancing quickly, focusing on specialty cocoa and establishing processing sectors, which could give them market advantages. Nigeria must not fall behind by solely exporting unprocessed cocoa beans or it risks significant economic losses and missed job opportunities.

Lessons can be derived from West African neighbors, Ghana and Côte d’Ivoire, whose cocoa boards have some successes but also shortcomings. Issues like administrative inefficiencies and fixed pricing can disadvantage farmers. Nigeria has an opportunity to study these models critically without falling into the same traps of inefficiency and stagnation. Adaptation and innovation must be central to the NCMB’s operations.

To truly succeed, the NCMB should create a governance model that incorporates both private sector input and genuine farmer representation, focusing on ecosystem coordination. Moving towards a flexible pricing strategy that reflects global market trends could also provide necessary protections and profit potential for farmers.

The NCMB will need strong collaborations with research bodies and will have to focus on technology, ensuring that traceability and sustainability are integrated from the ground up. Clear regulatory frameworks should be established to facilitate compliance with international standards like the EUDR. Additionally, rigorous oversight by the National Assembly will help maintain focus on the board’s core objectives.

In conclusion, the NCMB’s formation is a positive step forward for Nigeria’s cocoa industry at a crucial time. For this new board to succeed, it must learn from historical precedents and adapt strategies to present-day challenges. The future of Nigeria’s cocoa economy hinges not just on institutional reforms but also on creating a vibrant and supportive ecosystem. Actively addressing these needs through sustainable practices will be vital to revitalizing the sector effectively.

The establishment of the National Cocoa Management Board represents a critical opportunity to revitalize Nigeria’s cocoa industry, historically a pillar of its economy. However, successful implementation will require careful consideration of past failures, adaptation to modern realities, and a focus on fostering a sustainable and innovative industry. Ensuring comprehensive support for farmers and embracing technological advancements will be key components in transforming Nigeria from a raw cocoa exporter to a leader in cocoa products.

Original Source: businessday.ng