The Nigerian cocoa industry is making a powerful comeback after years of lackluster results and existing in the shadow of its past glory. Remarkably, as quoted by Businessday, the Nigerian Bureau of Statistics reported that the industry recorded a 304% boost in cocoa exports in 2024—a testament to the immense efforts to revitalise the sector.
This renaissance isn’t just a tale of facts and figures; it shows the resilient Nigerian spirit that consistently finds ways to rise up again after hitting its lowest points. But tenacity is not enough to preserve this growth; that brings up the important question – How can Nigeria sustain this cocoa boom and ensure long-term prosperity?
Here, we explore strategies to maintain the current growth momentum in the Nigerian cocoa sector and ensure the revival is not short-lived.
The Nigerian Cocoa Industry at a Glance
The Nigerian cocoa industry’s journey is a compelling story of rise, decline, and resurgence.
In the 1960s, Nigeria was a global powerhouse in cocoa production, ranking 2nd among exporters worldwide. The industry thrived, with actors enjoying substantial profits and contributing significantly to the national economy. However, Nigeria shifted its economic focus after discovering oil, neglecting the cocoa sector.
In the decades that followed, the once-flourishing industry experienced a steady decline, with the quantity and quality of Nigerian cocoa exports plummeting together with its reputation.
Today, the Nigerian cocoa industry is experiencing a comeback. Nigeria is steadily closing the volume and value gap as it works to catch up with other global leaders in cocoa export. This has helped renewed hopes that the industry can regain its lost glory and continue to grow in size and sustainability.
Global Context – Where is Nigeria in the World Cocoa Market?
Nigeria’s 304% cocoa export growth is impressive, but you should understand its context within the global market. While this surge is primarily attributed to an increase in the value of cocoa exports rather than a significant rise in volume, it underscores the positive trajectory of the Nigerian cocoa industry.
For the past half-decade, Nigeria has been averaging between 250,000 to 350,000 MT of cocoa exports annually according to FAOSTAT. The substantial percentage increase stems from the global rise in cocoa prices, which has significantly boosted the value per metric ton of cocoa exported. But in addition to the increase in value per MT, the Nigerian cocoa industry has also had substantial growth in production volumes recently.
Looking ahead, the Nigerian cocoa industry is projected to continue its upward trend and grow by at least 4% in the coming years according to the Nigerian Export Promotions Council. To achieve this, it is crucial to understand the factors that contributed to the current results and implement strategies to sustain and enhance it.
How Did the Nigerian Cocoa Industry Get Here?
The current boom in Nigeria’s cocoa industry is the result of a combination of favourable factors:
- Exchange Rate Dynamics: The sinking Nigerian Naira is the unexpected hero in this scenario. The Naira’s depreciation against major currencies has made Nigerian exports more affordable and attractive for international buyers, leading to increased demand for commodities like Nigerian cocoa in the global market.
- Increasing Global Interest: Beyond the foreign exchange rates, Nigerian cocoa is also gaining recognition for its unique flavour profiles and quality, attracting premium buyers.
- Government Initiatives: The Nigerian government has also played a notable part in the industry’s renaissance. It has initiated several policies and schemes aimed at supporting cocoa farmers, improving infrastructure, and enhancing processing capabilities. The government has also been collaborating with private sector actors to revitalize the cocoa sector.
- Increased Investments: Increased investment from both the public and private sectors has provided the necessary resources to rebuild the industry. Investments in modern farming techniques, diversifying the supply chain, and ensuring better outputs from the sector have also helped increase its value.
- Sustainable Practices: Consumers have become more conscious of sustainability considerations in food production and are more inclined to select sustainably sourced food items. As a result, Nigeria’s adoption of sustainable and regenerative farming practices attracts premium prices from environmentally conscious buyers.
These factors collectively have created a conducive environment for the Nigerian cocoa industry to grow and enjoy sustained success.
Strategies for Sustaining the Nigeria Cocoa Industry’s Resurgence
The Nigerian cocoa industry must adopt a multi-faceted approach to maintain its growth momentum and ensure long-term sustainability. Here are key strategies to consider:
1. Diversification
- Expanding into Cocoa Derivatives and Finished Products:
Product diversification offers immense opportunities to get more value from the same commodity. Exploring the development of cocoa derivatives such as cocoa butter, cocoa powder, and chocolate products will open Nigeria to opportunities for more value within the supply chain. With a robust processing industry, Nigeria will not only create additional revenue streams but also reduce dependence on raw cocoa exports.
- Value Addition:
Investing in local processing facilities will propel Nigeria up the value chain, as it produces higher-margin products that can compete in international markets. This shift can significantly boost the overall profitability of the cocoa industry.
2. Branding
- Developing a Strong ‘Nigerian Cocoa’ Brand:
Establishing a distinct and reputable brand for Nigerian cocoa can help command premium prices in international markets. Emphasising unique attributes such as flavour profiles, sustainable farming practices, and quality standards can make Nigerian cocoa more attractive to international buyers.
- Marketing and Promotion:
After developing the brand identity, stakeholders should invest in marketing campaigns to promote Nigerian cocoa globally. This will enhance brand recognition and attract more buyers. They should also consider increasing collaborations with international chocolate makers and participation in global trade fairs can further bolster the brand’s presence.
3. Farmer Education
- Continuous Training Programs:
Providing ongoing training for farmers on modern farming techniques, sustainable practices, and business skills is essential in sustaining the growth of the Nigerian cocoa industry. Educated farmers are better equipped to implement best practices, improve yields, and enhance the quality of their cocoa.
- Access to Information and Resources:
In addition to educating them, farmers should also be afforded access to the latest research, technological advancements, and financial resources that will empower them to adopt innovative practices and improve their productivity.
4. International Partnerships
- Collaborating with Global Chocolate Makers:
Stakeholders in the Nigerian cocoa industry should consider forming direct sourcing agreements with international chocolate manufacturers. Such partnerships will help guarantee a steady demand for Nigerian cocoa. Plus, they can also provide technical support and access to new markets.
- Knowledge Transfer and Best Practices:
International partnerships will also provide an open channel for exchanging knowledge and best practices, helping Nigerian farmers and processors adopt cutting-edge techniques and standards.
6. Climate Resilience
- Implementing Climate-Smart Strategies:
Protecting farms from the impacts of climate change is vital for sustainable cocoa production. This is achievable using strategies such as agroforestry, shade management, and water conservation.
- Research and Development:
Investing in research to develop climate-resilient cocoa varieties and farming practices will help mitigate the adverse effects of changing weather patterns and guarantee consistent yields.
Conclusion
The resurgence of the Nigerian cocoa industry is not a one-off event, it speaks to Nigeria’s resilience and determination. Moreover, the 304% growth isn’t just a statistic to grab attention, it tells of the Nigerian cocoa industry’s potential and capacity.
This growth has also provided a template to sustain it. It requires focusing on diversification, branding, farmer education, investment in processing, and international partnerships. These strategies will not only enhance cocoa production and quality but also create a robust and resilient cocoa sector capable of thriving in the global market.
As always, Sunbeth Global Concept is committed to supporting the Nigerian cocoa industry through continuous engagement with farmers, providing necessary resources, and fostering sustainable farming practices. Together, we aim to keep the momentum going and secure a prosperous future for Nigeria’s cocoa sector.
