NEXIM Mr Abba Bello

NIGERIA LOSING $190BN SELLING RAW COCOA SAYS NEXIM CHIEF

Nigeria’s Export Import Bank, (NEXIM) Managing Director, Mr. Abba Bello, has claimed that raw cocoa exports are responsible for Nigeria losing up to $190billion per annum.

In a headline-grabbing statement, Bello said that he believed Nigeria’s revenues from cocoa exports should be a whopping $200bn but the country is short-changing itself by exporting the raw beans instead.

The statement is a gross simplification of the issue, but Mr Bello, who seems to be following Ghana’s lead in calling for the country to move production up the value chain, knows that. 

His intent is to draw attention to the money ‘left on the table’ by not having the capacity to process the cocoa internally after decades of under-investment in the sector. This is also something that Mr Bello admits, in stating that his objective was to get investors, exporters and policymakers to start to orient themselves to this concept.

Mr Bello admitted that the country had been too reliant on oil, which has been the country’s main source of dollar currency – something Nigeria needs in their financial system. But he now wants to see more diversification, and he has the cocoa sector in his sights.

Currently, Nigeria earns about $10bn from cocoa exports, only one-twentieth of what Mr Bello believes is the country’s potential if they processed the raw beans and exported semi-finished product.

It is rather a paradox that despite our huge human and natural resource endowments, Nigeria remains a mono-product economy, with the crude oil sector contributing about 70% of government revenue and about 90% of export earnings.

Those numbers are, at least in the near term, fanciful. But even if they made significant investments into capital expenditure to build processing facilities, they will have to train and retain skilled workers and managers. This has been a challenge that Ghana has struggled to overcome.

However, we think Mr Bello is right to make a noise. Although the oil market has rallied recently, recent energy shocks have shaken confidence and woken dependent countries up to the reality that the future cash flows from oil cannot be relied upon forever. In other words, there needs to be a plan B. 

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