How Nigeria Can Improve Its Cocoa Industry

Every bag of cocoa that leaves Nigeria as unprocessed beans has two values. The first value is what gets recorded at the port. The second value, which is much bigger, comes from grinding, pressing, making ingredients, sweets, branding, and selling. Most of this value happens outside Nigeria.

Nigeria produces over 300,000 tonnes of cocoa each year but processes just about 50,000 tonnes. We grow the raw material for cocoa powder yet still import cocoa powder. This is not because we lack cocoa. It is due to an incomplete industrial system. Farmers struggle to connect with investors. Processors are unsure about getting reliable supplies. Lenders do not have solid production data. Exporters now must prove where their beans were grown and how they got into the supply chain.

The Abuja Declaration on Cocoa Value Addition gives us a chance to fix this issue. Nigeria, Ghana, Côte d’Ivoire, and Cameroon adopted it. It aims to boost processing in the countries that produce cocoa, improve earnings for farmers, and give African nations more say in the trade that relies on their crops. The Nigeria Cocoa Value Addition Accord brings this goal home by uniting government, producing states, farmers, processors, researchers, and development finance bodies for a common purpose.

This difference is important. The Abuja Declaration sets a regional direction. The national Accord must assign roles and track progress within Nigeria. The €85 million agricultural value-chain fund agreed upon by the Bank of Industry and the European Investment Bank provides much of the money needed to turn the declaration into action. At least 70 percent of this fund is set aside for cocoa and dairy, along with technical help on climate, environmental, and social standards.

The Problem of an Incomplete Industry

Cocoa used to help fund institutions and infrastructure in western Nigeria. But the rise of oil changed our national focus. This led to less attention on farming, research, and long-term crop finance. Problems built up over time: old trees and farmers, poor access to better planting material, diseases, bad records, high transport and power costs, limited working capital, and processing plants unable to secure enough beans at fair prices.

Nigeria has tried various interventions. Seedlings have been given out, rehabilitation schemes have been announced, and factories have received financing. But the deeper issue has been fragmentation. Farmers got support without guaranteed markets. Processors received funds without reliable supply. Traceability was seen as an export formality instead of part of commercial infrastructure. Each part moved, but seldom as a single chain.

Why the EIB Fund Is Important

The fund shows a meeting of interests. Europe needs reliable, legal, and deforestation-free supply chains. Nigeria needs patient capital, rural jobs, and more value kept at home. Ordinary loans do not usually fit cocoa. Newly planted or rehabilitated farms might take three to five years to produce, while processors need seasonal working capital and longer-term finance for factories, labs, and utilities. Development finance must be created around the life of the crop and the economics of processing.

The plan now being pushed by BoI’s managing director, Dr Olasupo Olusi, starts from these realities. BoI has suggested replanting finance with grace periods that match cocoa’s growth cycle. It also includes warehouse-receipt and export-prepayment finance, working capital that suits harvest times, and seven-to-ten-year funding for processing and ingredient production. Additionally, it has suggested shared processing facilities, quality labs, reliable utilities, and digital traceability systems.

This is proper developmental banking. It is not just about giving money, but shaping finance around the productive system it aims to support. It builds on work already in progress. BoI states it disbursed more than ₦164 billion to over 3,500 agricultural and food-processing businesses in 2025, linking nearly 48,000 smallholders to industrial value chains. The EIB partnership can strengthen that base through patient capital, technical support, and better environmental, social, and reporting standards.

Recent talks with BoI also revealed that the €85 million EIB fund is starting to take shape. Upstream work will cover farmer profiling, rehabilitation of old farms, environmental compliance, and capacity-building. Support is already beginning on the processing side. The key is connecting both ends. Renewing farms without a strong demand can leave farmers with more produce but the same weak bargaining power. Financing factories without enough beans can lead to costly, idle machinery.

The Link Between Farm and Factory

The missing link is the infrastructure between farms and factories. Nigeria still does not have a clear picture of who its cocoa farmers are, where their farms are, the state of their trees, what they produce, and how beans move from aggregation to processors and exporters. This uncertainty raises credit costs, complicates procurement, and weakens policy.

Market access is also a problem. From the end of 2026, medium and large operators bringing cocoa into the European market will need to show that it does not come from recently deforested land and that due diligence has been done. A map is just the start. A credible system must keep track of what happened when a risk was found, who looked into it, what actions were taken, and whether the issue was resolved.

This is not just extra work for foreign buyers. A well-designed system would benefit Nigeria beyond meeting European rules. Verified farmer and production records can enhance credit appraisal. Farm maps can assist rehabilitation and extension. Delivery histories can help processors plan purchases. The government can allocate seedlings and support more effectively. Nigeria must control key cocoa data, ensuring clear rules for farmer consent, ownership, security, and access. Otherwise, separate databases will just replicate the physical chain's fragmentation.

This effort will need public institutions, producing states, researchers, farmer groups, processors, exporters, financiers, field delivery groups, and agricultural tech firms. The approach from Farmforce and EverGreen for Africa in their work with BoI is clear: trusted local mobilization must connect with farmer registration, farm mapping, traceability, and reliable first-mile data. Practically, this means digital farmer registration, GPS and polygon mapping of farms, traceability of beans from farms through aggregation to processors and exporters, and managing environmental and human rights risks, all run as a single system instead of separate tools. Technology cannot organize farmers alone, and field relationships cannot meet the evidence needs of modern finance and trade.

Traceability should not become a complicated system that helps everyone but the farmer. Registration should create a recognized commercial identity. Mapping should improve access to finance, extension, and compliant markets. Production records should boost farmers' positions with lenders and buyers. Where higher standards lead to greater benefits, those who bear the costs of meeting them should also share in the rewards.

Three Markets, One Industrial Strategy

The market opportunity is wide. Nigerian bakers, drink companies, dairies, and sweet makers need powders, butters, liquors, compounds, and fillings, some of which are imported. Local supply would keep value and save foreign exchange. Across Africa, manufacturers need industrial cocoa ingredients, and the African Continental Free Trade Area expands the market. On the global stage, Nigeria can build a strong reputation for high-quality, traceable, and deforestation-free cocoa, instead of just being another source of raw beans.

From Declaration to Action

The benefits would extend beyond cocoa exporters. Renewing farms creates jobs for nurseries, extension agents, and rural service providers. More processing supports jobs in engineering, labs, packaging, storage, transport, and manufacturing. Women and youth can get involved through aggregation, quality control, data services, input supply, and small-scale processing. For the economy, the goal is stronger non-oil exports, less reliance on imports, foreign exchange, tax income, and a wider industrial base. For farming households, the expectation is simple: better harvests, reliable markets, and fairer earnings for their work.

The Abuja Declaration set a regional goal. The national Accord offers a way to coordinate. The EIB has provided long-term funds and technical help. Under Dr Olusi, BoI is starting to shape finance around the actual life of the crop and the needs of industry.

The remaining tasks are tough. Farms need renewal; credit must reach solid producers and businesses; processors need reliable supplies; compliance must be proven; and markets must be established before expanding capacity. Success will show in productive farms, full factory order books, traceable supply chains, and higher household incomes, not just in the number of signed declarations or announced facilities.

Making those connections will take more than money and coordination. EverGreen for Africa and Farmforce have already created a partnership that combines trusted local mobilization with farmer registration, farm mapping, and traceability infrastructure. This partnership could contribute to a wider national strategy: a shared cocoa farmer and farm registry, governed by common standards and clear rules for farmer consent, data ownership, security, and access. This system should be useful for financiers, processors, and public institutions rather than being rebuilt separately by every player.

BoI is well-positioned to lead this next step, ensuring that finance, extension, traceability, and market access function from the same trusted base. When these connections are made, the cocoa bean will stop being the end of Nigeria’s role in the industry. It will become the start of what the country produces, sells, and retains.