A technical expert to the Federal Ministry of Industry, Trade and Investments on the National Cocoa Plan, Ayo Akinola, speaks with Sami Olatunji on the challenges in the cocoa industry and the way forward for the country to fully exploit the cocoa potential

How would you describe the Nigerian cocoa industry now, and what has been your role and goal in this industry?

If we look from the historical perspective, and I speak about 63 years ago, the last 10 years have been the best years for cocoa. Surprisingly, I will say, and this has to do with the output of cocoa. The last 10 years have marked a 250,000 metric tonnes average, larger than any other decade before it. What has been responsible for this, I think, is the intervention of many factors, such as a lot more international sector players having affiliates in Nigeria, the need and demand for more quality cocoa, and the role of certification in the cocoa space, and the taking on of roles that traditionally did not belong to the actors. For instance, exporters and processors now have various layers of quality assurance to make sure that the cocoa meets up with international standards. This has helped the cocoa sector. However, there has not been much happening from the public sector, but a lot more has been happening from the value chain actors, a combination of development banks and local exporters and processors. So, yes, the cocoa sector is getting better. I think it is the second-largest non-oil export product. My role in this second is a default role and based on providence. Way back from my banking career, I have always been involved in the cocoa sector. During my credit career in banking, I funded a lot of exports and cooperative lending at the time. That prepared me for the role I took in the development sector. I transited from the banking sector into trading, export, import and then into the development sector, and I have been very active in that sector over the last 30 years. I have played even more prominent roles in the public sector, supporting Ondo state with the cocoa economy as a technical adviser to the cocoa council, supporting the federal government with the conceptualisation and implementation of the national cocoa plan, and getting involved in other projects across West Africa. The most recent is the African Cocoa Exchange, where I serve as the Nigeria country expert.

The Federal Government, many years ago, made huge forex from cocoa exports and even built a skyscraper in Ibadan called Cocoa House from part of the proceeds. Why and how did we lose our grip on cocoa production as a country?

If you look at what happened in 1986 with the SAP free-market reforms, the agricultural boards were scrapped. Unfortunately, there was a vacuum, and nothing was put in place to support that sector. Most of the institutional structures that were set up to make good quality cocoa, support farmers, give farmers access to financial services, agrochemicals and the lots, to make sure that the Cocoa Research Institute of Nigeria protects and supports its mandate, to make sure that good quality cocoa was produced and exported, to make sure that value addition was done in the right way and according to the policy that was set up; all these things were jettisoned. In its place, it became an all commerce affairs. It was around this period that Nigeria became an oil-producing country, and the focus moved from agricultural commodities to the oil sector. That was how we lost our grip on the cocoa sector. Unfortunately still, not having a dedicated clearing house or agency involved in cocoa. Over the years, we have had MDAs playing overlapping roles. Rather than having inter-agency cooperation, we have been having an inter-agency rivalry. Whether it was the Ministry of Trade and Investment or the Ministry of Agriculture, we were not sure who was leading. There are other agencies involved in the running of cocoa, and this puts the sector in a bizarre situation. Beyond the policy framework, we also have many actors in the sector without a guide.

What main factors prevent our country from maximising its cocoa potential? What are the challenges of cocoa production in the country?

 Cocoa contributes 0.13 per cent to the GDP. It is responsible for 1.04 per cent of exports and contributes 3.33 per cent to employment. This gives you a sense of where cocoa is and how it has been relegated in terms of relevance and prominence to other sectors like rice. There are a number of challenges in the sector. We have old trees and old farmers. The farmers are disenfranchised. The farmers are responsible for anywhere between 95 and 98 per cent of the cocoa production in Nigeria. For the most part, they are old, with an average age of 60 and 70. The trees are even older. The farmers don’t have access to financial services. The cooperatives they have are weak. They don’t have market power. That is affecting production. On the other hand, we have the problem of climate change, which affects local production. We still have incidences of pests and diseases. Also, from government to government, they don’t continue the policies that have been laid out for the cocoa sector. On top of all of these, the CRIN, which has the mandate for cocoa, suffers from acute funding challenges. So, it is not able to do what it is supposed to do.

In your experience engaging the public sector, how would you rate the government’s performance in encouraging cocoa farming, production, and export? Has the government done enough to incentivise the cocoa business in Nigeria? Also, how can government contribute to assisting farmers in increasing cocoa production?

On a scale of 1 to 10, I will rate them five. A lot has been done, but one of the issues here is the lack of inter-agency cooperation. In a recent survey that I did in the cocoa sector, we had about 27 federal ministries, departments and agencies involved in cocoa. That is a fiasco. Each of them has funding and overlapping mandates. This is not good for the economy. In the area of quality assurance, you have the federal produce agencies; you have the private inspection agencies, the quarantine services; you have the NAFDAC, SON, Customs, and NPA, all of them involved in quality assurance. But between and across all these agencies, there is no cooperation between them. It is not seamless, and there is a lack of cooperation, and this affects what the government is doing in spite of policies and protocols that should support the production of cocoa in Nigeria. In the area of export, I would say the NEPC is doing a great job trying to make sure that it supports cocoa farmers, exporters and processors. In recent times, we have seen more push by the Central Bank through the intervention funds. That has been quite helpful in recent times. That has supported mostly exporters and processors of cocoa without a trickle-down effect on farmers.

In what ways can investors and the government help add value to cocoa before they are exported instead of exporting raw cocoa?

For too long, sustainability has been seen from the buyers of our cocoa – they talk about environmental sustainability, supply chain sustainability, and biodiversity. All these are just big buzzwords that have not made the lives of farmers better nor encouraged local consumption. We need to consider the income and livelihoods of farmers, who toil day and night. Also, how do we consume more of what we produce? Because the more we consume, the less cocoa that goes into the international market, the more prices will change on account of supply-demand dynamics. There has to be a concerted government call for the consumption of cocoa. I think we need to add cocoa beverages to the school feeding programme. Cocoa has to be a national drink. Let’s consume more of our cocoa products locally. On a year-to-year basis, Nigeria imports anywhere between $72 to 160m worth of chocolate. Why can’t we encourage chocolate production in Nigeria? If we have an environment that supports this kind of things, the demand structure will increase, and you will see more young farmers going into the sector. One thing I did not mention before is that the cocoa sector is not attractive to the younger generation. That is why most of them, in spite of the fact that some of them are beneficiaries that have inherited farms, are no longer on the farms.

Cocoa has the potential to serve as a raw material for food and beverages, cosmetics, and pharmaceuticals. We produce cocoa in Nigeria, but we mostly get powder from it. Are there ways we can enhance this? How else can Nigeria benefit from cocoa’s end products? Also, in what area do you think Nigeria has a competitive advantage?

Across all the value chains mentioned – the food, beverages, cosmetics and pharmaceuticals, cocoa can do a lot. Unfortunately, we import most of these things. There has to be a massive sensitisation campaign to let people understand and know that these products are good, and this is what we can get from these products. In the area of cosmetics, cocoa butter is the base. A lot has to be done in the area of sensitisation, and a lot of R&D has to be done between the Cocoa Research Institute of Nigeria and the private sector.

With rising interest in tech, the digital economy and agrictech, how can the country leverage technology in the cocoa industry?

The cashless policy, the rise of smartphones, and the uptick of mobile technology by the use of smartphones have indeed helped the work that we do to provide end-to-end solutions that can be digitised. We already have them in the input sector. It started with a programme when you had electronic wallets served to farmers, I think in 2014 in the era of Adesina, when you had access to subsidised fertiliser, and the access was through telephones. Beyond that, we have moved to weather reporting systems, with farmers getting alerts on weather situations. We have moved to the issue of having apps that support training and blockchain mechanisms that provide end-to-end solutions and are built on IA and blockchain. We also have an inflow of agric-tech companies who are supporting certifications. Right now, we have georeferencing going on and transaction dashboards. All these things have helped in the production of quality cocoa. Also, there has to be a specific tech-enabled policy in the agricultural sector and broken down into various value chains.

In the nearest future, what potential does the cocoa industry have, and how can the country tap into it?

Nigeria is a very blessed country. The future of cocoa production, especially in SSA, will depend more on DRC and Nigeria. Nigeria stands strong in spite of climate change. But because of climate change and deforestation, there needs to be a lot of rehabilitation of existing cocoa farms. We are getting more private sector investments and interest in commercial cocoa production, and that is very good. What I am very happy about is that the main agricultural thrust of the current administration, based on the manifesto of Bola Tinubu, is looking at the re-establishment of cooperative agricultural boards. That would help in terms of dedicated policies for various value chains. Another aspect of it is to have a scale-up of the current commodity exchanges to support price recovery. That is also very helpful for the uptick in cocoa production.

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