Nigeria's cocoa sector struggles with unfinished industry, seeks value addition

Nigeria, a major cocoa producer, faces a significant challenge in its value chain: it processes only about 50,000 tonnes of its over 300,000-tonne annual output, meaning most of the value created from grinding, manufacturing, and branding is realized outside the country.

This situation stems from an unfinished industrial system. Farms struggle with poor connections to patient capital, processors face uncertainty regarding reliable supplies, lenders lack dependable production data, and exporters increasingly need to prove the origin and chain of custody of their beans. The consequences include aging trees and farmers, limited access to improved planting materials, disease, poor record-keeping, costly infrastructure, and processing plants unable to secure sufficient beans at viable prices.

The Abuja Declaration on Cocoa Value Addition, adopted by Nigeria, Ghana, Côte d’Ivoire, and Cameroon, seeks to address this by promoting processing in producer nations, improving farmer earnings, and increasing African states' influence over their agricultural trade. Within Nigeria, the newly established Nigeria Cocoa Value Addition Accord aims to implement this ambition by fostering collaboration among government bodies, producing states, farmers, processors, researchers, and development finance institutions.

Financing for this transition is partly secured through a €85 million agricultural value-chain facility between the Bank of Industry and the European Investment Bank. At least 70 percent of this facility is designated for cocoa and dairy, accompanied by technical assistance on climate, environmental, and social standards. This initiative marks a critical step toward transforming Nigeria's cocoa sector from a raw material exporter to a more integrated and value-adding industry.