Cocoa is Nigeria’s largest agricultural export and a cornerstone of rural economic activity. In Nigeria alone, more than three hundred thousand farmers rely on cocoa as a primary source of income. However, since a significant portion of Nigeria’s cocoa is exported as raw beans, much of the revenue earned by farmers stems directly from export markets.
This reliance underscores the pivotal role cocoa plays in sustaining local economies in cocoa-producing regions.
But, beyond grassroots benefits, the cocoa industry also contributes significantly to Nigeria’s GDP. This makes the sector a crucial economic contributor whose effect cuts across all levels from the grassroots to the global stage.
How Cocoa Farming and Trading Benefits Local Communities
Given its long history and prevalence in several parts of the southwestern and southeastern regions, Cocoa farming has been crucial to the livelihood of Nigerian communities for many years. As a popular cash crop, it has been a source of generational wealth and engagement for many farming families, even before the discovery of crude oil which has taken over as the country’s headline export for the past few decades.
Livelihoods and Employment
Cocoa farming sustains hundreds of thousands of Nigerians in rural communities. But this goes beyond just the sales returns of smallholder farmers, it also provides revenue-earning opportunities for the farm-helps, brokers, and transporters involved in its production and distribution. Essentially, the cocoa value chain provides direct and indirect employment opportunities for many, thereby fostering economic independence and interdependence in communities.
Infrastructure Development
Cocoa-induced logistics requirements stimulate development in rural communities as the need to move the products from the farms to demand areas prompts investment in infrastructures such as roads and storage facilities. Plus, it attracts businesses and investors looking to take advantage of opportunities in local communities. Thus, it opens up avenues for rural industrialisation and capacity development.
Economic Diversification
Cocoa contributes significantly to Nigeria’s foreign exchange earnings, diversifying an economy heavily reliant on crude oil. But beyond that, it has a better direct impact on rural economies than oil. Unlike cocoa, oil does not contribute much directly to the livelihoods of residents of local communities where it is sourced. This is because large corporations do most of the exploration and supply, whereas, the local population sometimes are left to suffer from the pollution and other negative effects of oil exploration
Challenges Limiting the Impact of Cocoa Exports in Local Communities
Despite its many positives, the Nigerian cocoa industry is not operating at capacity in terms of potential maximisation at the grassroots level. Several challenges and roadblocks are constantly limiting the sector.
Low Productivity
Low productivity is one of the biggest problems the Nigerian cocoa industry grapples with. Farmers produce relatively little output which limits their earning capacity. This is often a result of inefficient and outdated production practices. Farmers in most local communities lack access to modern agricultural inputs, such as fertilisers and improved seedlings which are necessary to maximise productivity.
Poor Output Quality
Quality control issues also undermine profitability as farmers sometimes produce cocoa beans that do not meet international quality standards. This often has a negative effect on the returns farmers get for their products.
Solutions and the Role of Cocoa Export Companies
Farmer Support Programs
To address the challenges local cocoa producers face, export companies often work with smallholder farmers, providing access to modern agricultural inputs, training programs, and credit facilities through consolidated groups and farmer societies. For example, Sunbeth has delineated farmers within its supply network into farmer groups with which it regularly interacts and channels its support and community development efforts.
Infrastructure Development
Export companies also contribute to sustainable economic growth in local communities through infrastructural development. Exporters sometimes build roads, storage facilities, and local processing plants to improve market access. These investments reduce post-harvest losses and add value to the supply chain by creating jobs within local communities.
Sustainable Practices
Export companies are mandated by several certification organizations such as the Rainforest Alliance to promote sustainable and environmentally friendly practices which also have positive economic impacts on the local communities.
That’s why, Sunbeth actively invests in and encourages land use measures that prioritize environment preservation by equipping farmers with tools and skills for sustainable cocoa production.
Looking Ahead: Building a Resilient Cocoa Industry from the Grassroots
To maximise the benefits of cocoa exports at the grassroots, stakeholders must adopt a collaborative approach through policy advocacy, incentivising research for the development of improved cocoa varieties, and engaging development partners for initiatives that empower rural farmers and promote sustainability.
By addressing challenges across the value chain, Nigeria can unlock the full potential of its cocoa sector, driving growth for both local communities and the national economy.
