Experts and stakeholders have met in an online forum to chart a path for the growth of the cocoa industry.
For cocoa to become more sustainable, governments at all levels must be at the center of a revitalization program. These were the words of industry leaders who participated in an online cocoa festival conference organized to design a blueprint for enhancing production to explore the opportunities provided by the African Continental Free Trade Area (AfCFTA).
The African Continental Free Trade Area (AfCFTA) agreement signed by Nigeria last year has created the largest free trade area in the world measured by participating countries. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) worth $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, experts said.
The scope of the AfCFTA is large. Its full implementation, according to participants during a virtual cocoa festival conference, would reshape the cocoa market and economies across the region. But achieving its full potential would depend on putting in place significant policy reforms and trade facilitation measures.
With the help of improved infrastructure, transportation, and logistics system linking the farms, they said, cocoa food products could enjoy many potential benefits and growth.
One of them was the Oloni of Eti-Oni, Osun State, Oba Dokun Thompson.
According to him, cocoa can reach its full economic potential if its strengths are properly harnessed.
Thompson, who is the promoter of, Cocoa Renaissance Initiative, said AfCFTA has the potential to increase business opportunities and incomes for cocoa farmers but a lot needed to be done to build a stronger system of production.
Through improved knowledge on best agricultural practices, he said small-scale farmers would be better equipped to derive optimal returns from their farms and become key contributors to the economy.
He said the conference – The Africa Cocoa and Chocolate Forum – with the Theme: Transforming the cocoa industry for impact with a focus on African Continental Free Trade Area (AfCFTA), was aimed at bringing stakeholders together to design a roadmap for translating production from subsistence to a market-oriented venture.
He said the Cocoa Renaissance Initiative, also aimed to promote the revitalization of the industry, was launched in 2016 during the Annual Cocoa Festival at Eti-Oni, Osun State, home to Nigeria’s oldest cocoa plantation and the birthplace of cocoa in Southwest by Eti-Oni Development Group (EDG).
The Global Coordinator for Friends of Eti-Oni, a registered United Kingdom Charity promoting Nigerian cocoa and raising awareness on the plight of cocoa farmers in Nigeria and Africa, Oluwayemisi Jenkins, said in April 2019 that the initiative launched the Eko Chocolate Show to boost chocolate and confectionery production in Africa.
This maiden edition themed: The making of the Nigerian chocolate showcased the spectrum of the value chain and value-added strategies from cocoa production to consumption.
Since the launch of the Initiative, she said the self-esteem and dignity of cocoa farmers were being restored as several of them had gone through farmers’ field school to work on improving the quality of cocoa produced. Also, the farmers’ business school helped them see farming as a business and not as a vocation.
A member of the Advisory Board of Eti-Oni Development Group, Rear Admiral Peter Shola Adeniyi (rtd) said the agricultural sector in Africa stands to gain the most if cocoa is properly harnessed. His words: “It is sad to note that the cocoa industry in Africa has only a meager annual market share of about $5 billion out of over $200 billion income from the global output; despite that Africa produces about 75 percent of the total world’s cocoa. We, at EDG, have been promoting the Cocoa Renaissance Initiative since 2014. The aim of which is to create the cocoa culture; by building the bridge between production and consumption, optimize the value proposition that cocoa offers, and creating wealth equitably for all, within the cocoa value chain. This is envisaged to pull farmers out of poverty and transform our society for the better by creating the necessary input for sustainable development and progress for the good of all. It is noteworthy, that cocoa production in 2019 from Nigeria was about 240,000 tonnes which accounted for about five percent of global production.
“Meanwhile, the export of cocoa (as beans, raw or roasted, whole or broken) in 2017 was valued $8.6 billion globally.”
Central to the success of the government‘s plan to use AfCFTA to increase agricultural production, according to the Chairman & Chief Executive, Lead Advisory, Prince Bimbo Olashore, is the adoption of sustainable cocoa farming.
With the increasing incorporation of technology in agriculture, Olashore’s hope was that cocoa would one day be able to produce high-yields with minimal resources.
To explore AfCFTA, he wants to see ambitious programs to help develop the national cocoa value chain, adding that the regional market calls for transformative action that can increase productivity and link farmers to sustainable markets.
The way forward, in his view, is the diversification of production systems.
The Secretary, National Action Committee on the African Continental Free Trade Area (AfCFTA-NG), Mr. Francis Anatogu, said the mandate of the Committee is to coordinate the Ministries, Departments and Agencies (MDAs), private sector, and other stakeholders to execute the AfCFTA’s readiness and prepare Nigeria to take full advantage of AfCFTA’s opportunities while safeguarding her economy from the potential negative impact.
He noted that Nigeria is the third-largest producer of cocoa beans behind the Ivory Coast and Ghana. His words: “Nigeria has sustained 11per cent growth in export of cocoa beans to the world over the last five years 79 percent of cocoa beans are exported to Europe for grinding and further processing.”
In an optimistic scenario, he said Nigeria could gain an extra $100 million worth of cocoa bean exports to Africa. If Nigeria increases its exports to Africa to be only 10 percent of the total exports, it would generate $80million to 100 million of value. The real $5 billion opportunities for Nigeria are in intermediate and final products. The African markets have the least or no imports of raw cocoa beans, despite the presence of local production for related industries, which is shown in their export values. But a 10 percent market share in the trade of intermediate and final products could lead to $5 billion gains annually.
A Development Finance Policy Executive/Researcher with the Central Bank of Nigeria (CBN), Dr. Olambintan Adebowale, noted that despite accounting for about 5.2 percent of global cocoa beans production, the industry in Nigeria continues to be constrained by many challenges, of which access to affordable and long-term finance is major. The CBN, according to him, has introduced several development finance interventions to support the domestic agricultural value chain development, by exploring the farm-to-table linkages.
Specifically, the bank is supporting the development of 10 high-impact commodities’ value chains, of which cocoa is one, through its Commodity Development Initiative (CDI).
The Managing Director, and Chief Executive Officer, Nigerian Export-Import Bank (NEXIM), Abubakar Abba Bello, said a lot needed to be done with cocoa in Africa.
He said: ”Specifically, for cocoa, it is the largest non-oil product that we export out of Nigeria and we need to grow in volume as well as the value we can add to that. So, for us at NEXIM, we had those facilities in place even before the AFREXIM support facility. From our own position, about 30 percent of our portfolio is lending to cocoa but unfortunately, most of it is in trading in raw cocoa beans and for us to be competitive, we need to move up the value chain. What we are doing with AFREXIM with the $1 billion funds is to facilitate everything that is required within the value chain that will make Africa more competitive in the global value chain for cocoa.
“Seventy percent of global cocoa is produced in Africa specifically West Africa and less than 10 percent of the annual global cocoa revenue comes to Africa and it is estimated that over $130 billion worth of chocolate trade is done globally and Africa does less than $10 billion.”
The Group Managing Director, Daddo Group of Companies, Hon Awwal Tukur, said cocoa is grown in 14 states. They are Abia, Adamawa, Akwa Ibom, Cross River, Delta, Edo, Ekiti, Kogi, Kwara, Ogun, Ondo, Osun, Oyo and Taraba. He explained: “In terms of production output, data available to me from top producer to bottom is as follows: Ondo, Cross River, Osun, Ekiti, Ogun, Edo, Oyo, Kogi, Abia, Kwara, Akwa Ibom, Taraba, Delta, Adamawa. From the above list, it is clear that Adamawa State is ranked the least in terms of production within Nigeria.
What is important to note, he continued, however, was that Adamawa is already on the cocoa map, and “it is surprising the number of people and organizations who have no idea of this, Even people within Adamawa State have no idea we are a cocoa-producing state let alone the majority of Nigerians. Within Adamawa, cocoa grows in three local government areas of Jada, Ganye, and Tongo – located in the southern part of the state towards the border of Cameroon. In Summary, many cocoa farmers in Adamawa State abandoned the cultivation of cocoa due to the capital-intensive nature, the long gestation period to harvest, and lack of access to the market.
He said the federal and state governments were combining efforts to revamp cocoa cultivation in the state with the provision of land for cocoa production, improved seedlings to the farmers, and other agricultural input to ease the several challenges encountered by them. “Adamawa may not be a major producer but is on course to maximizing the possible output from the producing regions within the state,” he said.