We project Lagos coconut transaction value to reach N350bn by 2024 – Olakulehin, GM, LASCODA
January 26, 20211.5K views0 comments
- We’ll make coconut products among top export commodities by 2022
- Also among highest income generating cash crops
The coconut tree, also referred to as the tree of life, is renowned for its multifunctional derivatives, health benefit, delectable taste and, most importantly, its global market relevance.
ReportLinker, an international market research firm, in its global market report on the coconut industry, disclosed that in 2019, coconut water on the global market was valued at approximately $4.27 billion, with the projections of hitting $8.3 billion by 2023, while the global coconut products market valued at $11.5 billion in 2018, fuelled by a soaring demand, especially in the cosmetic, food, and beverage industry, is expected to hit $31.1 billion by 2026.
However, a 2019 statistics by the United Nations Statistics Division showed that Nigeria, despite being a coconut producing country, has not actually leveraged on this multi-billion dollar industry, spending about $219,446.53 on coconut importation.
The high importation level was further confirmed by Nma Okoroji, president, National Coconut Producers, Processors and Marketers Association of Nigeria (NACOPPMAN), who stated that Nigeria’s productivity is low, compared to required consumption, forcing the country to import over 80 per cent of the crop.
Based on this premise, Business A.M.’s ONOME AMUGE interviewed DAPO OLAKULEHIN, a long serving, experienced agriculture expert, who is currently the general manager, Lagos State Coconut Development Authority, an agency responsible for the administrative operations of coconut in Lagos, Nigeria’s highest coconut producing state.
When was LASCODA founded and what is the purpose of its establishment?
It was established in 1996 but became operational in 1998 with the mandate of promoting the production, processing, and commercialization, both for the local and export market and the overall utilisation of coconut in Lagos State.
What is your assessment of the market relevance of the coconut crop business and its contribution to the Nigerian economy?
Coconut has a lot of economic potential. It will be recalled that prior to the advent of crude oil, it used to be one of the cash crops that Nigeria exported and earned an income. However, just like other cash crops, coconut became neglected in favour of crude oil. As of now, there have been renewed efforts at boosting coconut production because the government is beginning to see its economic relevance. The World Atlas, an international magazine in 2018, reported an increase in demand of coconut products by 500 per cent in the last decade. This shows that coconut is having a lot of economic potential that the country can tap into. We have about 1000 kilometres of coastline in Nigeria with the capacity to support coconut cultivation, of which 180 kilometres is in Lagos State. Apart from the coastlines, it is noteworthy that coconut can be planted in over 26 states. Talking about the economic relevance of coconut, about 150 products can be derived from the crop and virtually every part of the tree is useful. The coconut oil, for instance, has been recognised to be a healthy source of oil in cooking and production of oil-based confectionery, cosmetic and pharmaceutical industries. As a result, the demand for coconut oil keeps rising, an opportunity Nigeria has to harness in the global market. The market also provides a value chain which almost everyone can partake. Areas such as production (cultivation), marketing, processing and the rest can be effectively utilized, thanks to the encompassing nature of coconut.
What policies have LASCODA implemented to ensure coconut production and investment is made more attractive to encourage participation of potential investors?
Since inception, LASCODA has worked towards four basic mandates which include, to promote coconut production, promote its processing, promote commercialisation and utilisation. These four key mandates are what drive us to bring in investors.
In the area of production, we are encouraging commercial farmers to go into cultivating coconut. We are encouraging communities and families with old plantations that are not producing efficiently, to rehabilitate their coconut plantations. Apart from encouragement, we are also supporting them. For instance, in 2020, we distributed about 140,000 coconut seedlings to commercial farmers, communities and local governments.
More so, in terms of cultivated production, some of the allottees of the Lagos State government, especially in the Epe area, are being encouraged to cultivate coconut instead of relying on the coastal belts production alone. We now have farmers in the hinterland that we are supporting and promoting to cultivate coconut. We have also enlightened commercial farmers to delve into coconut production because of its commercial advantage instead of concentrating on vegetables alone. There is this erroneous belief that coconut will only do well in coastal belts which is wrong because anywhere that oil palm is doing well, the probability of coconut doing well there is also very high. With good agronomy and management practices, coconut will perform very well. Also, in the production of coconut seedlings, we have developed a technology in conjunction with the National Institute for Oil-Palm Research (NIFOR) stationed in Badagry. This ensures that coconut seedling is being produced within six to nine months instead of the two to three year period when employing the traditional method and we are selling these improved seedlings to farmers and investors at subsidised rates.
For processing, we are supporting processors with equipment and production materials. Last year, the governor supported coconut processors with about five thousand seeds for processing just to empower them. Beyond that, we also do a lot of capacity building so that the processors will be able to produce to meet the industry needs and for export. We also support them with linkages to markets so that when they finalise processing, they have a ready market to sell their produce. We also link them with the farmers so that they get the raw materials with ease and at an affordable price. However, we have realised that we are under-utilising the coconut because, out of the various products we are getting from the coconut, we concentrate much on coconut oil. We came up with the idea of using coconut shells and as of now, we have trained over 100 youths on how to process coconut shells into arts and craft use. From this training alone, we have about 30 youths whose livelihood is based on processing coconut shells into arts and craft.
In addition, a factory is to be established in Badagry before the end of the year and the basic thing the factory will be doing is the processing of coconut husks. There is no way you can have a greenhouse without using coco peats, the fibre extracted from the coconut husk. The countries that depend largely on greenhouse technology need these products in large quantities. The factory, which is a Public-Private Partnership (PPP) project, is expected to produce 10,000 metric tonnes of coconut husks per annum in which we will be having coco fibres and coco peats. We are hoping that the factory will become operational before the fourth quarter of 2021. The factory, when constructed, will give direct employment to about 1000 people that will be working there daily and also provide indirect employment in terms of transporters, aggregators and other related services to about four thousand people. In actual sense, we want that factory to be the hub of commercial activities and it is expected that other related industries will spring up around the area, creating more opportunities for investors.
In terms of commercialisation and utilisation, we have increased the consumption level of coconut. You will discover that the coconut as a fruit is not as consumption friendly compared to other fruits because of its hard nature. As a result, we have found a way of diversifying it to make its consumption friendlier. We did a survey and realised that apart from rice, the most important staple food in Nigeria is bread and it is consumed by nearly every household. We thereafter had discussions with the private bakeries asking them to include coconut flour in bread production and we gave them samples. We supported the interested bakeries and also gave them a franchise for the production. Presently, the production of coconut bread has increased and can be found in commercial quantities in many parts of the state. Apart from that, we now have small scale industries that are into coconut flour and coconut flakes production.
What are the major challenges affecting coconut farmers and its production and how has LASCODA been able to address these issues?
One of the challenges we are facing generally when it comes to coconut production is that it has a long gestation period. It takes about three to four years for the dwarf and hybrid coconut to start yielding fruits, while it takes six to seven years for the West African variety to start fruiting. Many farmers are not patient enough to wait within that period of time. Most farmers prefer crops with a shorter gestation.
In addressing this, we are encouraging them to combine coconut cultivation along with other crops like sweet potato, which is a creeping crop that does not require weeding and other expenses. This will ensure that before the coconut starts fruiting, you will be getting something to harvest within a short period of time.
Another problem we have is that many of the coconut plantations we have in Lagos are old and have grown past their productive stage. The implication of this is that what we are producing is not meeting the processing need. The local coconut production to the processing need is just about 40 per cent with the larger percentage being imported from neighbouring countries, including Ghana and Ivory Coast. Why this is so is that the number of coconut processors has increased, the awareness of the importance of coconut has also increased, and this puts pressure on local production.
In the last five years, coconut production has increased but despite the increment, we are still unable to meet the processing needs because processors are springing up almost on a daily basis and whatever effort we are making towards increasing production is targeted at rehabilitation. This year, we are giving about 50,000 seedlings to farmers at subsidised rate, but it will take about four to five years to yield results. Another challenge is that most of the coastlines where coconuts are supposed to be grown are being used for other development purposes, like the jetty, port, tourism projects and other infrastructures. We have been able to engage with stakeholders and members of the communities on how we can rehabilitate the other areas for coconut cultivation bearing in mind that aside the economic benefits of coconut, the trees are naturally created to shield the land from water encroachment and coastal erosion.
What are the roles and expectations of financial institutions towards contributing to the development of the coconut industry?
I am looking forward to a situation whereby the financial institutions will support the government in rehabilitating coconut cultivation in the coastal belts in the form of Corporate Social Responsibility (CSR). We have about 25 banks in the state and these banks can all partake in rehabilitating specific coastline areas and funding coconut development projects in those areas because it isn’t something the government can do alone. Aside the banks, other corporate bodies can also be engaged in such projects.
Have you been able to discuss with the financial institutions about this?
No, but we are sending proposals to them, under their CSR units, requesting their support in relation to their capacities or any length of coastline area of their choice they are able to support the state government to rehabilitate.
What is your assessment on the commencement of the AfCFTA deal and its impact on the coconut industry?
I think it is a very good deal for the coconut industry because it makes investors and stakeholders accessible to markets in Africa with little or less complicated procedures and bottlenecks. Take for instance, the coconut oil; there are so many markets that need it out there within Africa and we have a lot of processors over here. It will also help commercial farmers in countries such as Ghana, Ivory Coast, and Togo to supply our processors with large quantities of coconuts, which is not a bad deal. Let them bring their coconuts; we are going to process it here and sell the processed products to them and other countries in Africa, generating bigger revenues in return. The scenario is similar to planting cocoa here and sending it to Europe where it is processed into chocolate which is generating high revenues for the production industries.
The Lagos State government recently confirmed a partnership with the Food and Agriculture Organisation (FAO) regarding the coconut industry, what does the partnership entail and its benefit to the economy?
As you know, the FAO is an international agency with expertise in all areas of agriculture. We are aiming at getting technical assistance from them. Technical assistance in the sense that with the FAO’s involvement, we are able to garner training and knowledge on how to improve coconut production, make better yields and also, learn from the experiences of leading coconut producers like Sri Lanka, India, the Philippines and others. The partnership will also involve international experts who will work with us to see how we can rehabilitate our coconut belts effectively and efficiently. The project will also enlighten us further on the utilisation of coconut.
The partnership will help us further on research findings and also help in technology as well. For instance, coconut water cannot be produced effectively for the market now; not that it is not possible, but the technology that will make it possible is not available here. By the time they come with their technical expertise, it will draw more investors into the coconut value chain and also, improve the productivity of farmers per hectare. Thankfully, the country representative had a successful discussion with the state government and the partnership is expected to take off within the first quarter of this year.
What are your projections and expectations for the coconut industry in 2021?
Well, coconut is a crop with a long gestation period and whatever we put into effect this year will take some time to yield the expected result. The Lagos State government has a roadmap which coconut features prominently. Presently, we have about 2.5 million productive coconut trees in the state. Our projection is that by 2025, we should have up to 10 million productive coconut trees. If we are able to reach that mark, Lagos will make Nigeria to be among the top 10 coconut producing countries in the world. We are also looking towards making coconut products among the top export commodities and one of the highest income generating cash crops by 2022. The current transaction value of coconut in Lagos State (inclusive of all the value chains) is at the rate of N76 billion per annum and one of our projections is that by 2024-2025, the transaction value will rise to N350 billion.