Nigeria’s cocoa production has significantly declined, now only 6% of global output. The National Cocoa Management Board is proposed as a solution to restore the industry. Key goals include price stability, improved quality standards, and local processing to increase earnings. Success depends on learning from past errors and embracing technology and strong governance.
Nigeria, which was once the world’s second-largest producer of cocoa, currently only contributes about 6 percent to global production. This steep decline has been attributed to the oil boom in the 1970s, which redirected attention and funding away from agriculture. However, a new piece of legislation aiming to create the National Cocoa Management Board (NCMB) could represent a pivotal policy change. If implemented effectively, this board could help revive Nigeria’s cocoa sector and secure livelihoods for millions involved in its supply chain.
From the mid-20th century until the 1970s, cocoa was central to Nigeria’s economy, providing nearly half of the country’s export revenues. The success of this sector was bolstered by regional marketing boards like the Western Nigeria Cocoa Marketing Board, which supported farmers through research and stable pricing. Unfortunately, the subsequent military regime centralized these boards, and various issues such as bureaucracy, corruption, and inconsistent pricing severely hindered growth. Farmers also dealt with issues like slow payments, insufficient infrastructure, and diseases that damaged crops.
The final blow to the industry was dealt in 1986, when the national cocoa board was dissolved, leading to a market that lacked coordination. Today, production levels have dwindled to between 200,000 and 300,000 metric tonnes per year, in stark comparison to Ghana’s 700,000 and Côte d’Ivoire’s 1.8 million. The proposed NCMB, as outlined by Agriculture Minister Abubakar Kyari, strives to address these historical issues by coordinating production and providing better access to credit for farmers.
The objectives of the NCMB include ensuring price stability, improving quality standards, and promoting the local processing of cocoa. Currently, Nigeria processes less than 10 percent of its cocoa locally, missing out on significant earnings. By processing more cocoa into finished products, Nigeria could potentially increase its earnings from a mere $750 per tonne to up to $4,000 per tonne. The ambition is to move beyond being just a supplier of raw cocoa and become an active player in producing consumer goods like chocolate and cocoa butter.
However, experts caution that reviving Nigeria’s cocoa trade will not be easy. As highlighted in a recent Vestance report, the global cocoa market is undergoing significant changes. While demand—especially from Asia—is increasing, regulations like the European Union Deforestation Regulation (EUDR) impose strict requirements on cocoa sourcing. Smallholder farmers often struggle to meet these compliance demands, creating further barriers for market access.
Latin American countries such as Ecuador and Brazil are rapidly advancing by investing in premium cocoa and local processing. If Nigeria continues to emphasize the export of unprocessed beans, it risks getting left behind economically. Observing the successes and failures of West African neighbors like Ghana and Côte d’Ivoire could provide Nigeria some valuable lessons. However, simply copying their models isn’t advisable due to their own criticisms, like price controls that often disadvantage farmers.
For NCMB to succeed, it will need to embrace a hybrid governance approach, balancing state involvement with private sector input. The focus should be on creating an ecosystem that improves coordination rather than rigidly controlling prices. Implementing a flexible price system that adjusts with market trends may provide a protective yet profitable structure for farmers, as well as addressing their fundamental needs like access to quality inputs and digital technologies.
The NCMB must also ensure alignment with international standards while developing local frameworks to support compliance. Incorporating technology, including digital traceability and AI-driven credit solutions, could enhance the industry’s efficiency. Lastly, strong legal frameworks and oversight will be critical to maintaining focus on value chain development and preventing misalignments.
In conclusion, the creation of the NCMB represents a timely opportunity for Nigeria’s cocoa sector. Its success will depend on learning from past failures and tailoring approaches to current conditions. A vibrant cocoa economy is not achievable through the establishment of a single board alone; it requires a coordinated framework of infrastructure, access to credit, effective research, and robust governance. Nigeria’s cocoa future hangs in the balance, and decisive action is needed to revitalize this critical industry.
The establishment of the National Cocoa Management Board (NCMB) could prove pivotal in revitalizing Nigeria’s diminished cocoa industry. By focusing on essential areas such as quality improvement, local processing, and price stability, the NCMB aims to transition Nigeria from merely exporting raw cocoa to enhancing domestic value chains. While challenges remain, especially in adapting to new market regulations, learning from both successes and mistakes of neighboring countries will be crucial for a sustainable cocoa economy.
Original Source: businessday.ng
