Falling cocoa prices due to a glut in the market as well as falling demands from the developing world is forcing West Africa’s cocoa powerhouses to change their strategy and focus on local consumers.
“What we are doing is to see to it that there is increased consumption in our local markets which are already highly populated,” Sayina Riman, President of the Cocoa Association told businessamlive in a telephone conversation.
West African producers including Ghana, Nigeria and Ivory Coast have felt the sting of lower prices in recent times. For example, Ghana, the world’s second largest producer of the commodity, lost about $1 billion in its 2016/2017 season.
The private initiative headed by Riman has an elaborate plan to grow domestic consumption of cocoa through a number of initiatives that will see Africans have better access to cocoa products.
- West African businesses to leapfrog tech adoption as PwC, SAP drive…
- U.K risks losing global leadership spot in open banking as market…
- United Nigeria chair wants special govt funding for local operators
- Petrol will be available at affordable prices in two weeks, IPMAN assures
- Three Key Global Strategy Challenges Companies Face
“Our plan is to infuse the culture of serving cocoa drinks into the schools feeding programme of the Federal government of Nigeria, and make it the official drink in the National Youth Service Corp, (NYSC) programme, as well as all military formations within the country.”
With the right policy, Riman believes the nation can do more. Speaking on the initiative being worked on by his association, he said: “If just 20% of Nigerians (36.4 million people) consume 250 grams of locally processed cocoa drink in two weeks, at the end of the year, we’ll have consumed the 250,000 metric tonnes of our local capacity. If that amount of cocoa is taken off the global market of cocoa, there is bound to be an immediate reaction.”
Riman explained the initiative would stimulate the real sector of the economy.
“This initiative is bound to attract foreign direct investments, FDIs, into the country, creating value investment and employment in the process. Aside this, this initiative will also stimulate the economy, as it costs about N5 billion to set up a small cocoa processing factory.”
According to the Cocoa Association president, historically, cocoa had sustained Nigeria’s economy before and it can still bring the nation’s economy out of the doldrums.
“If government can drive this initiative for 10 years, it would become a national culture and would change the way we do things.
He added that the policy consistency was the bane of Nigeria’s development plans in all sectors including the local production and consumption of cocoa.
Cocoa is Ghana’s third biggest revenue earner with its 2015 export earnings from cocoa beans, paste and butter put at $3.355bn. Nigeria, fifth biggest producer of the commodity, exported N375.2bn worth of cocoa between 2012 and 2014, while figures from the Nigeria Export Promotion Council, NEPC, show that Nigeria’s earning from cocoa was put at N140bn in 2012, N104bn in 2013 and N131bn in 2014.