It has been a busy year for the cocoa sector in Nigeria, with talk of how the country has squandered its opportunity in the cocoa market with its exclusive focus on oil. Outspoken critics of the status quo have called for the country to invest more, improve the agriculture sector and ultimately, move up the value chain.
One local company seems to have listened. In Ondo State, Johnvents Industries acquired a cooperative factory in Akure and converted it into a modern cocoa processing plant after investing millions of dollars.
According to the company, it can process 15000 metric tons of cocoa using the latest automated processing equipment. In the factory, cocoa liqueur, cocoa butter, and cocoa powder will be manufactured, which will be sold both locally and internationally.
The company also plans to make a localised version of the product. The company knows that, before they can sell cocoa products to Nigerians who don’t have a taste for chocolate or cocoa products yet, they must encourage them to try them. Their plan is to create small, but pure bags of cocoa in 5 g sachets.
Following the footsteps of the Chinese economic model, Nigeria and other African countries want to increase consumption of chocolates made locally, with their own cocoa. Currently, Nigerians export the beans at low cost, and buy back the chocolate at high cost, so it’s understandable that they want change.
It is also important to recognize that key agricultural commodities like cocoa contribute significantly to a country’s foreign exchange reserves. This is how countries get hard currency, like dollars. The act of owning foreign currency as part of your reserves is a safeguard against an unexpected event such as the devaluation of your own currency. In such a situation, a developing country might have difficulty purchasing important goods if they didn’t have foreign reserves in a stable currency.
For some countries like Ghana and Cote d’Ivoire cocoa can be a major contributor to the foreign currency reserves. Nigeria historically has been dependent on oil, and they are now looking to diversify, although the recent strengthening of oil prices might make that weaken the case.
Following in the path of Ghana’s recently opened processing plant owned by Cargill the Johnvents cocoa processing factory will also employ only local indigenous people. Although the factory is highly automated, the owners point out that many livelihoods are connected to their production and will benefit.
The factory was commissioned yesterday and the owners hope it will represent a watershed moment for Nigeria’s cocoa industry.
