Nigeria is one of the biggest producers of cocoa beans in the world. The country makes up 12 percent of the global cocoa production. It is currently the fourth-largest producer of cocoa, producing 370,000 metric tonnes. Nigeria’s journey in the cocoa industry traces back over a century. The country was once the world’s second-largest cocoa producer. That golden era showcased Nigeria’s agricultural potential. But as the decades passed, the industry faced many challenges that led to its decline. 

Today, the nation stands with an opportunity to tap into the potential of its cocoa industry. In this case study, we discuss this opportunity and the challenges that come with it.

Discover how outdated farming practices, lack of infrastructure, policy missteps, and underfunded processing facilities have hindered Nigeria’s cocoa sector.

Explore initiatives like improved seed varieties, modern farming techniques, re-establishing a cocoa board, and private-sector investments to boost cocoa quality and production.

Learn how targeted actions, including training programs, infrastructure development, and international partnerships, drive efficiency in the cocoa supply chain.

See how increased cocoa production, enhanced processing capacity, and better market access improve farmers’ incomes, create jobs, and strengthen Nigeria’s economy.

The government shifted its focus away from agriculture after the discovery of oil. As the oil boom brought wealth, agricultural farms became neglected. Of those farms were also the cocoa farms. This shift had lasting impacts, reducing the quality and quantity of cocoa production. Nigeria is revisiting its agricultural roots at the onset of the evolving markets. The country is seeking to diversify its economy and reduce its oil dependency. Cocoa, a crop well-suited to Nigeria’s climate and soil, is a key player.

With renewed interest, various sectors are changing to restore the cocoa industry. By investing in new technologies, Nigeria is on track to being a leading cocoa producer. 

Nigeria’s cocoa industry has faced many challenges that have stunted its growth. Many of these challenges are due to the government’s poor economic decision-making. These decisions have left lasting scars on the industry. For example, the cocoa marketing boards were dissolved in the 1980s. The main aim of this was to liberalize the market. Instead, it led to a decline in the quality and profitability of cocoa production. This meant that the pricing and quality control support structure was now removed. And the cocoa farmers were now left to navigate the market independently without help.

The other main challenge has been the antiquated nature of many cocoa farms. These farms use outdated methods and low-quality seeds, which, combined with the aging trees, results in lower yields and low-quality beans. The lack of modern agricultural practices worsens this situation. Access to efficient farming technology is necessary to compete globally, and the current global standards for agrarian practices demand these technologies.

Another challenge is the need for more operational efficiency in cocoa processing plants. These plants run at around 8% capacity, an infrastructural challenge. These inefficiencies can be attributed to outdated equipment and unreliable supply. The general lack of investments also limits the country’s production ability. It prevents farmers from adding value to the cocoa before exporting it for higher profits.

The solution to the challenges was a combination of policy reforms and intervention. To address critical issues in the industry, the value chain was revitalized. This was a central effort to the entire process alongside improved practices. The processing plants were also a part of the solution as their capacity increased.

The introduction of improved cocoa varieties was the first step in the solution. Then came the initiative to adopt modern farming practices, which aimed to increase the yield per hectare and ensure the beans’ export quality. Policy reforms to ease access to these technologies were also crucial. The training also provided to the farmers helped facilitate this easy access to the technologies.

There is a strong push to re-establish a cocoa board or something similar. This entity is meant to provide coordinated oversight and support. This board would be crucial in conducting some key tasks for the cocoa industry, including stabilizing prices, ensuring quality control, and negotiating better terms in international markets. It would also focus on securing investments for infrastructure improvements. These investments are necessary for processing cocoa within Nigeria, adding value before export.

Private sector involvement is increasing as companies realize the sector’s potential. These companies are partnering with local farmers to improve production and investing in the industry to tap into the lucrative global chocolate market.

Nigeria aims to overcome the challenges by properly implementing these solutions. This can help the country reposition itself as a global giant in the cocoa industry. These changes will benefit the cocoa sector and the broader Nigerian economy. They will significantly impact job creation and boost foreign exchange earnings.

The implementation process involved a lot of strategic planning and execution. It was a combination of collaborations and policy reforms. The steps mentioned were designed to modernize and improve the sector. Here are some of those steps meant to transform the cocoa sector of Nigeria:

Introduction of Improved Cocoa Varieties:

The government has partnered with agricultural research institutes to introduce high-yield, disease-resistant cocoa varieties. For example, the Cocoa Research Institute of Nigeria (CRIN) has played a role in this effort. CRIN provides farmers with access to these improved seeds, which are crucial for increasing productivity and sustainability.

Modernisation of Farming Practices:

Training programs for farmers on modern farming techniques were introduced. In these programs, they received training on how to use eco-friendly pesticides and fertilizers. Organisations like Babban Gona help carry out these programs. They support smallholder farmers by offering training and resources to help them adopt these new practices.

Infrastructure Development:

Efforts to enhance the infrastructure within the cocoa value chain were undertaken. International initiatives included renovating and upgrading processing facilities. An example is the USDA’s $22 million initiative to improve agricultural practices. This initiative enhances processing facilities to ensure the cocoa is processed locally. Thus, adding value becomes easier before the products are exported.

Re-establishment of a Cocoa Board:

Significant advocacy exists for re-establishing a cocoa board to regulate the industry. This board would focus on many issues crucial to the industry, including price stabilisation, quality control, and global marketing of Nigerian cocoa.

Private Sector Investment and Partnerships:

Private sector investment has increased in the last few years. Now, various companies are engaging in direct partnerships with cocoa farmers. For example, large agribusinesses provide micro-loans and quality seeds. They also offer other essential inputs to improve crop quality and yield. These partnerships help bridge the gap between small-scale production and large-scale commercial demand.

These implementation steps are crucial for revitalising Nigeria’s cocoa industry. By taking these actions, the sector can improve production and quality, which will, in turn, improve its market competitiveness. The increased economic benefits will bring positive changes to the country.

The solutions and their implementation have shown promising results. Recent data indicates a noticeable increase in cocoa production volumes. For instance, Nigeria’s cocoa production quickly increased from 340,000 tonnes to an anticipated 500,000 tonnes within a few years. This demonstrates the effectiveness of the new farming techniques and seed varieties.

Additionally, the quality of Nigerian cocoa has improved, leading to better market prices and increased foreign exchange earnings. The increased processing and infrastructure investments have allowed more local cocoa processing, which has helped add value to the country’s cocoa products before export. For example, some local processing plants have reported a boost in operational capacity, thus reducing dependency on foreign processing.

These developments have improved cocoa farmers’ livelihoods. Many smallholder farmers have reported higher incomes and improved living standards. The sector’s growth has also created more jobs in agriculture and related fields.

These results mark a crucial step towards achieving Nigeria’s goal of once again leading the global cocoa market. Ongoing efforts are expected to further enhance the sector’s competitiveness and sustainability.

The progress made so far in Nigeria’s cocoa sector has been nothing short of mesmerising. This transformation is a beacon of hope for the entire agricultural industry. However, it is essential to remember that even though progress has been made, it isn’t the end. Continued efforts and monitoring are essential to keep this progress moving forward. Looking forward, the focus should be on processing capacity and facilities. Cocoa producers’ market access also needs expansion.

Further investments are also required to establish a solid infrastructure for the industry. These efforts are crucial to solidify the country’s position in international markets. The future of Nigeria’s cocoa industry holds a lot of promise and potential. It can bring enormous economic benefits for the country and its people.