Can Nigeria fill cocoa supply gap?

The cocoa industry in Nigeria is facing a pivotal moment as the global cocoa market experiences a drop in output from major producers Ghana and Cote d'Ivoire. This decline has led to a significant increase in cocoa futures prices, presenting both challenges and opportunities for Nigeria, a country looking to capitalize on the current market dynamics. Akin Laoye, CEO of FTN Cocoa Processors, sheds light on the state of Nigeria's cocoa sector and what needs to be done to leverage the situation. Nigeria, although a cocoa producer, finds itself in a position where taking immediate advantage of the supply gap posed by Ghana and Cote d'Ivoire is not feasible. Laoye mentions that it would require about two years of preparation to fully exploit the market opportunity. Countries like Ghana and Cote d'Ivoire have been able to support their local farmers through increased farm gate prices, highlighting the need for proactive measures to enhance productivity in Nigeria's cocoa sector. The recent Apex Commodities report reveals that the majority of Nigerian cocoa farmers are smallholder farmers with limited land holdings. However, there is a positive trend of younger farmers entering the sector, signaling a potential shift towards a more vibrant and efficient cocoa industry. Government support is crucial for the growth of the cocoa sector, especially in encouraging young people to engage in cocoa farming. Laoye emphasizes the need for policymakers to make land available and provide incentives for aspiring cocoa farmers. By creating supportive policies around land ownership and infrastructure development, the government can attract more youth to the sector and enhance cocoa production in the country. Additionally, establishing favorable trade agreements between farmers and processors can further stimulate interest and investment in cocoa farming. On the processing side, challenges related to capital remain a significant hurdle for cocoa processors in Nigeria. The sharp increase in cocoa prices over the past year has escalated working capital requirements, making it difficult for processors to meet financial obligations. Laoye calls for intervention funds tailored specifically for the cocoa sector to alleviate financial constraints and drive growth in cocoa processing. Stakeholder engagement with the government is essential to address the pressing issues faced by cocoa processors and ensure a conducive business environment for the industry. Looking ahead, Nigeria's cocoa production is projected to increase by 10% this year, reaching 320,000 metric tons. With favorable weather conditions and strategic planning, Nigeria is on track to meet its production targets and capitalize on the growing demand for cocoa. As the government and industry players collaborate to address the challenges hindering the sector, there is optimism for a thriving cocoa industry in Nigeria. The engagement between stakeholders and policymakers holds the key to unlocking the full potential of Nigeria's cocoa sector, ultimately benefiting local farmers and the economy at large.