Nigeria generated N122.9 billion from the export of raw cocoa beans and cocoa products in the first quarter of 2022, according to the minister of Agriculture and Rural Development, Muhammad Abubakar. That makes cocoa one of the largest contributors to total export earnings in Nigeria.
Being Nigeria’s largest agricultural export, the cocoa industry is a vital source of employment and income for several Nigerians, especially those in local communities and rural areas. This sector plays an important role in supporting sustainable economic growth in the country.
The Positive Impacts of Cocoa Exports On Nigerian 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 farmers for many years. As a popular cash crop, it has been a source of generational wealth and engagement for many, even before the discovery of crude oil which has taken over as the country’s headline export for the past few decades.
For several local Nigerian communities, Cocoa farming and distribution provides direct and indirect employment opportunities for the members. Several players from farmers, laborers, and transporters, to small-scale local traders, are actively involved in and benefit from the cocoa value chain.
In addition, the cocoa industry fosters development in rural communities as the need to move the products from supply sources to demand areas encourages investment in infrastructures such as roads and storage facilities. Plus, it attracts businesses and investors looking to take advantage of opportunities in local communities.
On the international stage, cocoa export plays a vital role in Nigeria’s economic growth. Data from the Observatory of Economic Complexities (OEC) places Nigeria as the 5th largest exporter of cocoa globally which makes the product responsible for a large chunk of the country’s total foreign earnings. Plus, it contributes immensely to diversifying the economy and easing its dependence on crude oil export.
Challenges Faced By the Cocoa Producers and Communities In Nigeria
Despite its many positive contributions and noteworthy milestones, the Nigerian cocoa industry, particularly at the base of its value chain, is not operating at capacity in terms of potential maximization. The sector has largely been plagued by several challenges that consistently undermine its efforts and growth prospects
The biggest problem faced by the Nigerian cocoa industry is low productivity – a result of inefficient and outdated production practices. Often, farmers in local communities lack access to modern agricultural inputs, such as fertilizers and improved seeds which are necessary to maximize productivity.
In addition, quality control issues also undermine profitability as many cocoa beans produced in Nigeria do not meet international quality standards. This often has a negative effect on the returns farmers get for their products.
How Cocoa Export Companies Help To Address Industry Challenges
To address the challenges faced by producers at the local level, cocoa exporting companies often work with smallholder farmers, and other members of the value chain at the production level to support sustainable economic growth in cocoa-producing regions. A common example of this is through continuous investment in initiatives that support smallholder farmers, such as providing access to modern agricultural inputs, training programs, and credit facilities.
These initiatives help to improve the yield and quality of cocoa beans, ultimately leading to higher returns for the farmers and improved livelihoods for local communities.
Another way cocoa export companies contribute to sustainable economic growth in these communities is through infrastructural development. By constructing motorable roads, storage facilities, and processing plants, they upgrade the production and distribution process for the communities – improving the value chain and reducing post-harvest loss.
Furthermore, cocoa exporting companies also support sustainable economic growth by promoting environmentally friendly practices. For example, they actively invest in and encourage land use measures that prioritize flora and fauna preservation. They do this by equipping farmers with tools and skills for sustainable cocoa production.
Overall, cocoa production and export contribute significantly to the economic and infrastructural development of several local communities in Nigeria. And by extension, it plays a crucial role in supporting sustainable economic growth in the country.
However, the industry’s growth is consistently undermined by several challenges at the local level of the value chain.
Cocoa exporting companies are doing their parts working with local communities and the government to address these challenges and support growth in the Nigerian cocoa value chain.
