Nigeria faces the potential loss of over $20 billion in cocoa exports within the next three years if the country fails to meet European processing and reporting standards, according to Rabiu Olowo, Executive Secretary and Chief Financial Officer of the Financial Reporting Council of Nigeria (FRC). Olowo raised these concerns during an oversight visit by the House of Representatives Committee on Commerce to the FRC in Abuja.
Highlighting the urgent need for sustainability in cocoa production, Olowo emphasized that Nigeria must pay closer attention to deforestation, farmland management, and the processing of its cocoa to remain competitive in the global market.
“It will interest you to note that the issue of sustainability is absolutely important; that’s why we’re driving it very, very rigorously,” Olowo stated. “Nigeria is on the brink of losing over $20 billion in cocoa exports within the next three years if we do not align ourselves with the processing and reporting expectations of Europe. Our cocoa is essential for making chocolates and other products, but without proper attention to deforestation and farmland management, our products will not be competitive, and that is the real issue.”
Ahmed Munir, Chairman of the House Committee on Commerce, also addressed the gathering, noting that the committee has developed a four-year strategic plan to foster effective legislative frameworks in Nigeria. Munir emphasized that the visit aimed to strengthen collaboration between the legislature and the executive branch, particularly in areas critical to the country’s economic growth.
The warnings come against a backdrop of fluctuating global trade in cocoa beans. According to research from CEPII, Nigeria exported $489 million worth of cocoa beans in 2022, with the primary destinations being the Netherlands ($189 million), Indonesia ($105 million), Malaysia ($87.9 million), Canada ($29.4 million), and the United States ($16.9 million). However, the global trade value of cocoa beans decreased by 20.3% between 2021 and 2022, dropping from $10.4 billion to $8.29 billion.
Data from the National Bureau of Statistics (NBS) further underscores the significance of cocoa in Nigeria’s agricultural exports. In Q1 2024, cocoa beans ranked as one of the top agricultural exports, with superior quality cocoa beans valued at N230.85 billion and standard quality beans at N140.09 billion. Major export destinations included the Netherlands, Malaysia, and China.
To address these challenges, Olowo revealed that the FRC has initiated discussions with the Ministers of Agriculture and Environment. These talks have yielded strong commitments from corporate Nigeria to enhance sustainability practices and boost exports, ultimately increasing the country’s foreign exchange earnings.
As global markets become increasingly stringent on sustainability standards, Nigeria’s ability to adapt and align with these expectations will be critical in safeguarding its position as a leading cocoa exporter.
