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Nigerian Cocoa Investment Summit sets out to revitalize sector

Under the premise of “Reviving the industry,” the inaugural Nigerian Cocoa Investment Summit—held this past December in Lagos—set out to reposition Nigeria on the global cocoa market and emphasized the need for the country to bolster its cocoa production amid a growing global demand for chocolate. The Summit was organized by USAID/Nigeria (through its Nigeria Expanded Trade and Transport (NEXTT) and Maximizing Agricultural Revenue and Key Enterprises in Targeted Sites (MARKETS II) programs) in conjunction with partners IDH, Olam, and Afreximbank. It attracted 58 participants spanning all sectors of the cocoa value chain including researchers, producers, investors, buyers, and policy makers.

The key takeaway was the need to modernize the production of cocoa on a large scale, using nucleus farms, which would help to attract investment. “Cocoa production has not progressed in any appreciable way technologically since the 19th century,” noted Eduardo Tugendhat, CEO of NEXTT implementer CARANA Corporation. “There is a need for funding for technology that creates the highest value for the market.” Furthermore, experts advocated for an increased involvement of the underemployed youth in cocoa production, which will only be achieved if the business is made more profitable through modernization.

Segun Awolowo, CEO of Nigerian Export Promotion Council (NEPC), announced the establishment of a Cocoa Corporation Board of Nigeria as the crowning piece of the national government’s strategy to revitalize the country’s cocoa industry. The Board will be funded by the public sector yet driven by the private sector and will be jumpstarted with an initial funding of US$10 million from the World Bank. Tugendhat, however, warned that a board that simply collects dues from farmers will not serve its purpose. "[All key players] must be committed to drive a desired and needed change in the sector."

Nigeria is a major global producer of cocoa but it is losing its share of the expanding global chocolate market—worth more than US$80 billion—due to the small size of the farms and the old age of cocoa trees. At an annual 300,000 metric tonnes, Nigerian cocoa production lags behind smaller neighboring countries Ghana and Cote D’Ivoire, which boast 700,000 MT and one million MT respectively.

Published January 2015