Published On: Thu, Nov 10th, 2016

Cocoa crises hampering Nigeria recovery

Cocoa farmersLAGOS, (CAJ News) – AN underperforming cocoa industry has been cited as hindrance to diversify Nigeria’s revenue base.

Analysts see it as a further blow to current macro challenges that have resulted in an urgent call to boost the non-oil economy and encourage non-oil exports.

First Bank of Nigeria (FBN) said arguably, cocoa led Nigeria’s agricultural exports but following the cut in the projected cocoa output for 2016, Nigeria has slipped to seventh position in the league table of largest producers of the commodity from fourth.

Output was cut from 270 000 metric tonnes (mt) to 190 000 mt.

Ivory Coast, Indonesia and Ghana remain the leading three producers. In West Africa, Nigeria ranks third in terms of cocoa exports behind Ivory Coast and Ghana.

Industry sources suggest that Ghana currently produces 700 000 mt per year. Meanwhile, Nigeria’s annual production is approximately 250 000mt.

The target is to hit 500 000mt over the next few years.

“Given that the potential exists to grow cocoa across at least 20 states in the country, Nigeria is performing below par when compared with its peers within the West African region,” said FBN.

FBN decried the insignificant impact of the N100 billion Development Fund for the cocoa value chain, secured in 2014.

“To our knowledge, the impact of this initiative on the cocoa production segment has been very little.”

FBN said to drive the economic diversification narrative, more support from the government by means of fully implemented intervention funds was a necessity.

“In addition to this, efforts towards an effective industrial take-off for the Nigerian economy would accelerate the diversification process.”

CAJ News

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