Does Cocoa Board think Nigeria is in for cooperation or competition with their cocoa sector renaissance?


Cocoa Diaries interview with CFAN President continues.

Continued from Part One:

Further in the conversation, I asked about their overarching goals with this revival. I wanted to understand where their focus was. On whether they were going to repeat Ghana’s mistakes of prioritising the political benefits and any benefit to the farmer to be an unintended consequence, he highlighted increasing youth employment, the attraction of foreign direct investment, foreign exchange earnings, and increasing the living standards of smallholder farmers’ areas as the main goals they want to achieve.

  • Increase youth employment:

To Mr. Adeola, by increasing cocoa production, they can domesticate cocoa processing to the point where 80 percent of their cocoa will be processed locally. Value addition, in this case, will lead to the creation of jobs which will divert the youth from engaging in social vices. He believes the youth becoming a farmer is another source of employment and a strategy to sustain cocoa production.

  • The attraction of Foreign direct investment:

He said that with Ghana and Ivory Coast’s long-standing focus on developing their cocoa sector, they had become the destination for foreign cocoa-related investment. The proliferation of foreign-led sustainability programmes and infrastructural development in the cocoa sector of these two countries was seen by Mr. Adeola as the consequence of their years of hard work and focus on the industry.

  • Foreign exchange earnings

He also intends to increase Nigeria’s foreign exchange earnings with cocoa-related exports. He said that currently, Cocoa stands as the second largest foreign exchange-earning commodity in Nigeria, with oil being the first. To him, Nigeria has a lot of foreign exchange deficits; hence, the reason for the devaluation of the Nigerian currency to the US dollar. So, with Nigeria being an import-dependent economy, he believes that boosting its foreign exchange earnings with an increased cocoa export portfolio can stabilise the Nigerian economy and lead to reduced inflation.

  • Increase the living standards of smallholder farmers
    In the 1950s, he recalled that most of the infrastructure built in the 1940s and 60s was created using their forefathers’ cocoa proceeds. To him, it showed that they made much more money from cocoa then. However, today, the most ‘Ungood’ building that cannot attain any commercial rate today is what smallholder farmers can build in Nigeria. So, for you to see the kind of asset the farmer owns today as opposed to the 1940s shows clearly how they are not remunerated as they should. Cocoa prices are being determined in the international market with no recourse to the farmers’ investment. So, to him, with the institutions of the LID, hopefully, Nigeria joining the LID bloc will be essential for improving the living standards of Nigerian cocoa farmers. 

With his songs of praise about the Ghanaian cocoa sector, I reminded him that Ghanaian Ffarmers are awarded a producer price for their cocoa beans, which is a percentage of the world market price. This means the farmer only receives part of the world market price for their cocoa beans, which we touted as inadequate even if the farmer received the total price. So, I sought to find out how he and his leadership intend to handle cocoa revenue management, and how different they would be from Ghana.

He recounted that in 1986, the then Cocoa Marketing Company of Nigeria was dissolved, liberalising the sector for private sector participation. To him, this liberalisation retarded the industry as government influence was non-existent, allowing stakeholders like the buyers to act as it best suited them. He argued that when the Nigeria marketing board existed, cocoa productions were high, and he claimed it made them known to be the best producer of grade one cocoa in West Africa. The quality of their cocoa beans today has reduced due to the non-existence of regulatory agencies supervising cocoa development and management of cocoa marketing to protect smallholder farmers. He hopes they could set up a body like Ghana’s cocoa board to work with all the stakeholders to manage all the areas required to ensure that Nigeria reverts to the top.

To him, whatever they do will be foregrounded by consultation with their internal stakeholders, including external actors like Ghana and Ivory Coast, and use their feedback to curate a marketing board management model that would not repeat the shortcomings Ghana and ivory Coast have experienced or are being criticised over the years for. He added that development is in stages, and that Nigeria already had a marketing board until it dissolved; hence, they have many more experiences and insights to learn and create a robust one. He recounted in my article where I highlighted how Ghana farmers are paid a producer price in Ghana cedi, yet, their beans are sold in US dollars, hence, farmers losing out on the exchange rate benefits they could have gained to reduce the effects of the high inflation they experience as some of the issues they would ensure never happens to Nigeria farmers. He added that developments, like a pension scheme for cocoa farmers in Ghana – launched recently in 2022, are vital lessons they can learn from and develop to help Nigerian cocoa farmers.

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