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

Nigeria is seeking to revitalize its cocoa industry by establishing the National Cocoa Management Board (NCMB), following a significant decline in production share. The board aims to address historical challenges, promote local processing, and ensure farmer support. While the proposal offers hope, it must navigate the complexities of evolving global regulations and competition.

Nigeria’s cocoa industry, once a giant on the global stage as the second-largest producer, has seen a stark decline. Currently, it represents just six percent of global cocoa production, lagging behind countries like Côte d’Ivoire and Ghana. The root of this decline traces back to the oil boom of the 1970s, which diverted essential resources from agriculture and marked a significant lost opportunity for the nation. However, a proposed bill to create a National Cocoa Management Board (NCMB) could ignite a much-needed revival, potentially restoring Nigeria’s cocoa prominence while securing livelihoods for millions along its value chain.

Historically, cocoa was a linchpin of the Nigerian economy, contributing nearly 50 percent to national exports between the 1940s and 1970s. During this golden age, organizations like the Western Nigeria Cocoa Marketing Board offered crucial support through research and price stabilization efforts aimed at aiding smallholder farmers. Unfortunately, the centralization of these boards during military rule, coupled with issues like bureaucratic red tape and corruption, crippled the industry’s growth. Farmers faced a plethora of issues, including delayed payments, poor infrastructure, and diseases like the swollen shoot virus that drastically reduced cocoa production.

The downfall was solidified in 1986 when the national cocoa board was disbanded, leading to a fractured market lacking coordination and adequate support for farmers. This vacuum left many farmers exposed to fluctuations in pricing and without access to necessary credit or quality agricultural inputs. Today, Nigeria’s production is estimated at between 200,000 and 300,000 metric tonnes per year, markedly lower than Ghana’s 700,000 and Côte d’Ivoire’s impressive 1.8 million metric tonnes.

As outlined by Agriculture and Food Security Minister, Abubakar Kyari, the NCMB is designed to address these historical inefficiencies. The board will aim for a broad mandate to improve production coordination, grant accessible credit to smallholder farmers, enhance the quality of cocoa products, promote local processing, facilitate regional collaboration, and stimulate both youth engagement and climate-smart agricultural practices. These goals not only resonate with long-standing industry demands but are also fundamental for a significant turnaround.

The successful implementation of the NCMB could usher in price stability and standardized quality for international markets. This is particularly crucial given that Nigeria only processes less than ten percent of its cocoa locally, leaving much of the value untapped. Currently, Nigeria earns around $750 per tonne on raw cocoa beans, while processed goods in Europe can fetch up to $4,000 per tonne. A robust value chain is essential not only for increasing production but also for shifting Nigeria’s position from merely sending raw beans abroad to becoming an influential player producing cocoa-based products like chocolate.

Reports, including those from Vestance, indicate that while the NCMB offers hope, the road to revitalizing Nigeria’s cocoa sector will be fraught with challenges. Particularly, the global cocoa market is evolving, and new regulations, such as the European Union Deforestation Regulation (EUDR), enforce stricter standards around sustainability and traceability. This could present significant hurdles for Nigeria’s current farmers, who often lack the necessary resources and infrastructure to comply.

In contrast, countries like Ecuador and Brazil are rapidly progressing up the value chain, investing in premium cocoa varieties and local processing, thereby securing prime spots in high-value markets. If Nigeria fails to adapt and continues to rely solely on exporting raw beans, it risks forfeiting economic opportunities and jeopardizing employment prospects in this critical sector.

Learning from Ghana and Côte d’Ivoire’s established cocoa boards could provide helpful insights, although these systems are not without their criticisms. Fixed pricing models can disadvantage farmers, especially during price booms, while corruption and inefficiency are ongoing concerns. Nigeria’s approach must be measured, considering lessons from these countries without simply replicating their faults.

It’s vital for the NCMB to adopt a governance framework that incorporates both state oversight and active private sector participation, ensuring that farmers have a genuine say in board decisions. Instead of fixed prices, a flexible pricing model aligned with global market trends could provide necessary protections and promote growth for farmers. The board must focus on building Nigeria’s competitiveness on the international stage by meeting farmers’ needs through greater access to research, improved quality inputs, and modern farming techniques.

A proactive alignment of Nigeria’s cocoa supply chain with global standards, including the EUDR, is essential. Emphasizing technology, such as digital traceability and AI-powered financial systems, can enhance operations and foster transparency within the industry. Legal protections, including performance audits and oversight from the National Assembly, will be crucial in keeping the board accountable and focused on developing the cocoa value chain.

The establishment of the NCMB is a positive development but its success depends on extracting lessons from past experiences and adapting these insights to the current landscape. Revitalizing Nigeria’s cocoa economy demands more than a new board; it requires well-coordinated initiatives in infrastructure, credit availability, research, market access, and heightened oversight. The time to act is now.

In summary, Nigeria’s cocoa industry stands on the brink of a potential resurgence with the proposal of the National Cocoa Management Board. This initiative aims to rectify historical failings and establish a coordinated system that can support farmers and enhance Nigeria’s position in the global cocoa market. Yet, significant challenges, particularly from new international regulations, must be addressed. The emphasis now should be on leveraging technology and fostering a responsive governance model to adequately support stakeholders within the cocoa value chain.

Original Source: businessday.ng