The resurgence of interest in Nigeria’s cocoa industry is fueled by soaring global cocoa prices, reaching a record $12,000 per tonne in December 2023. This price surge, triggered by climate change and disease impacting major producers like Ivory Coast and Ghana, has presented Nigeria with a unique opportunity to capitalize on the market demand and potentially challenge the dominance of these leading cocoa-producing nations. While Nigeria currently sits as the seventh largest producer globally, the government has set an ambitious target to boost production to 500,000 tonnes by the 2024-2025 season, aiming to secure the fourth position in the global ranking. This renewed interest is attracting both local and international investors, evidenced by the British government’s recent $40.5 million investment in Nigerian agribusiness company Johnvents. The optimism surrounding the industry is palpable amongst farmers who are experiencing unprecedented profits and are eager to expand their operations.
Nigeria’s cocoa farmers, unlike their counterparts in Ivory Coast and Ghana, are directly exposed to the fluctuations of the global cocoa market. While this presents a higher degree of risk, it also translates to greater potential rewards when prices are high, as they currently are. The December peak has subsided, but prices remain significantly elevated at over $8,000 per tonne, a considerable increase from the typical range of $2,000-$3,000. This sustained price increase incentivizes farmers to invest in cocoa production, driving expansion across the sector. Consequently, there is a noticeable surge of individuals and businesses venturing into cocoa farming, driven by the prospect of capitalizing on these favorable market conditions. The hope is to not only benefit from the current price boom but also establish a stronger footing in the global cocoa market.
Despite the potential, reaching Nigeria’s ambitious production target presents significant challenges. Ivory Coast and Ghana, the current global leaders, produced over two million and 650,000 tonnes respectively in 2023. Their production was significantly hampered by adverse weather and disease, highlighting the vulnerabilities even established producers face. While Nigeria has so far largely avoided these issues, the path towards increased production carries its own set of environmental and logistical considerations. One concern is the growing trend towards “full-sun” monocrop cocoa plantations, which, while potentially boosting yields in the short term, raise concerns about long-term sustainability and environmental impact. Studies have shown that these monoculture systems can be less environmentally friendly compared to traditional agroforestry systems that incorporate shade trees and promote biodiversity.
Expanding cocoa production sustainably requires a comprehensive approach that addresses not just output, but also environmental protection and the needs of small-scale farmers who form the backbone of the industry. The government’s establishment of the National Cocoa Management Committee in 2022 is a step towards regulating the sector and providing support to farmers. However, the transition to larger-scale production needs careful planning and investment. Farmers like Peter Okunde, who cultivates a four-hectare cocoa plantation, highlight the crucial need for access to land and capital, both essential for expansion. These are not merely financial hurdles, but represent fundamental requirements for scaling up operations and realizing the industry’s full potential.
While land access is a significant constraint for many smallholder farmers, industry experts like John Alamu, Group Managing Director of Johnvents, argue that the issue is not simply land availability, but rather a lack of comprehensive support systems. Nigeria boasts 1.4 million hectares dedicated to cocoa production, exceeding Ghana’s 1.1 million hectares. Alamu advocates for a more holistic approach, emphasizing the importance of government support in the form of seedling provision, training on good agricultural practices, and a strong focus on sustainable agriculture. These measures, he argues, are crucial to not only increase production, but also to ensure the sector’s long-term viability and restore Nigeria to a leadership position in the global cocoa market.
In conclusion, while the current high cocoa prices present a lucrative opportunity for Nigeria’s cocoa industry, realizing its potential requires a multifaceted strategy. Balancing increased production with environmental sustainability and addressing the needs of smallholder farmers is crucial for long-term success. While the ambitious 500,000-tonne target might be challenging to achieve immediately, the renewed interest, coupled with strategic investments and supportive government policies, could pave the way for Nigeria to become a major player in the global cocoa market, potentially challenging the existing hierarchy and securing a more prominent role in the industry’s future. The focus must shift from mere expansion to sustainable intensification, incorporating best practices, ensuring farmer welfare, and safeguarding the environment for future generations.
