Despite the federal government’s export drive initiative, Nigeria’s five remaining cocoa processing plants are operating at just eight percent of their installed capacity.
This decline is attributed to worsening macroeconomic challenges that continue to hamper the sector’s growth and productivity.
According to businessday.ng, The once thriving industry that had 15 cocoa processing factories with a combined installed capacity of 250,000MT now has only five factories functional with a combined utilisation capacity of 20,000MT per annum.
A combination of issues ranging from high energy costs, multiple taxations, farmers’ preference to sell their cocoa beans to merchants -who offer premium prices over processors and a difficult operating environment is making it unattractive for Nigeria’s remaining cocoa processing factories to tap export demand for butter, cake and powder.
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“It is very challenging and tough for the Nigerian cocoa processors and there is a need to declare a state of emergency in the sector,” Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria (COPAN) said in a Tuesday briefing with Journalists.
“We need about five times the working capital used last year to secure key inputs now, coupled with other rising costs associated with production,” he added.
…NAFDAC’s new export regulations to compound industry woes
According to him, the harsh operating environment in the country has forced several processors to shut down operations and the few operating to do so at less than installed capacities.
He noted that over N500 billion in investments in machinery are tied down in the industry over the collapse of several processors, adding that the situation in the sector will further worsen if the government-approved National Agency for Food and Drug Administration and Control (NAFDAC) proposed export regulations 2024.
“Cocoa processors are being strangled through various policies and now NAFDAC is coming with another sword,” Oladunjoye noted.
