Remarks for the Lagos Consul General – Nigeria Cocoa Summit Lagos (December 8, 2014)

The Executive Director, Nigeria Export Promotion Council, Mr. Olusegun Awolowo
Leader of the Cocoa Value Chain Program and Representative of the Federal Ministry of Agriculture, Dr. Peter Aikpokpodion
Former Secretary to the Government of Nigeria, Chief Olu Falae
Representative of the Cocoa Association and Members of the Association
Representatives of Partnering Organizations – Olam Nigeria and IDH,
Chief Executive Officer of CARANA Corporation, Mr. Eduardo Tugendhat
Chief of Party for the USAID trade project, Mr. Alf Monaghan,
The Media

Ladies and Gentlemen

It’s an honor to be here in the company of so many committed individuals who know that Nigeria can play an important role in meeting the global demand for cocoa. Those here today have the knowledge and capability to assist in the renewal of Nigeria’s cocoa industry.

Although there is an insatiable worldwide appetite for chocolate, Nigeria is not positioning itself to take advantage of the opportunity that represents. When I travel through the regions of Nigeria, I am struck by the fact that cocoa is still raised by hand, not by machine, and remains a very labor-intensive commodity to produce.  Cocoa production is still very much a family enterprise, from planting to carrying the bags of cocoa beans to the buyers, who may be far away from their farms. Despite the physical labor involved, farmers are realizing very limited incomes from their efforts.

This reality is aggravated by factors that are often beyond the control of farmers including pests, weather and diseases that affect yield, and the prices that are frequently fluctuating on world markets.

The U.S. Government has been working very closely with the Nigerian government, as well as with the country’s private sector, to advance Nigeria’s Agricultural Transformation Agenda.  Bringing transformation to this country’s troubled cocoa sector is what brings us together today.

As we all know, global demand for cocoa is rising faster than cocoa production. Emerging economies such as China and India have developed a taste for chocolate, and many consumers can now afford the luxury. Cocoa consumption in developed economies is also up, with more and more consumers now demanding darker chocolate with upwards of 70 percent cocoa content. Given my love of chocolate, I am happy to read recent press reports that doctors are finding there are even health benefits from eating dark chocolate – without too much sugar.

With this rise in demand, international buyers are predicting a potential cocoa shortage by 2020. This has already contributed to cocoa prices rising 25 percent in the past year.

But sadly, cocoa production here in Nigeria is diminishing. Cocoa farmers and their trees are aging, and farmers are getting some of the lowest yields on the continent.  Farmers are tending small plots of land, often less than two hectares and are not making the investments needed to maintain quality or productivity. With high interest rates, and the cost of inputs exceeding farmers’ ability to pay, the sector is not seen as a viable way to make a living. Sons and daughters of cocoa farmers are heading to the cities for other opportunities.

Clearly, something needs to change if Nigeria is to take advantage of rising global demand for quality cocoa. This Summit provides an excellent opportunity to begin a discussion on how to again make cocoa a significant contributor to Nigeria’s economic development.

The solutions to improved competitiveness in the cocoa sector exist – they are not unknowns. Improved access to inputs, finance and investment, technology, and technical assistance to raise quality are all part of the solution.  Making cocoa a viable prospect for youth employment is a real possibility and in the context of Nigeria, an absolute need.  The challenge is to come to agreement among all the actors – government and private – to put these pieces together in a way that enables Nigerian agribusinesses to thrive over the long term.

This is precisely the reason that the U.S. Government is supporting this summit and encouraging the coordinated development of the Nigerian cocoa industry.  I wish you the best of luck today in holding fruitful discussions, and developing a coherent plan to usher in a new era in Nigeria’s cocoa sector.

Thank you.