Nigeria risks losing $20bn in cocoa exports-FRC

The Executive Secretary and Chief Financial Officer of the Financial Reporting Council of Nigeria, Rabiu Olowo, has said Nigeria is at risk of losing over $20bn in cocoa exports within the next three years.

He said the loss is likely to occur if the nation does not align with the sustainability adoption road map which will affect the processing and the trade acceptance of the product in Europe.

Olowo said this when the council received a delegation from the House of Representatives Committee on Commerce led by lawmakers representing Lere Federal Constituency in Kaduna State, Ahmed Munir, on Monday in Abuja.

He said adequate attention must be paid to deforestation and farmland management, as the issue of sustainability is very important.

Munir said, “It will interest you to note that the issue of sustainability is absolutely important, that’s why we’re driving it very, very rigorously.

“Nigeria is on the brink of losing over $20 billion in cocoa exports within the next three years if we do not align ourselves with the processing and the reporting expectations of Europe.

“It’s our cocoa they use in making chocolates and all of that. But if you don’t pay attention to deforestation, the way you arrange your farmland, the way you process your, I mean, and all of these things, your products or how good will not be competitive, and that is the real issue.”

According to CEPII research and expertise of the world economy, In 2022, Nigeria exported $489M in Cocoa Beans. The main destinations of Nigeria’s exports of Cocoa Beans were the Netherlands ($189M), Indonesia ($105M), Malaysia ($87.9M), Canada ($29.4M), and the United States ($16.9M). In 2022, Nigeria imported $47 in Cocoa Beans, mainly from Turkey ($47). These include Cocoa Beans (Raw/Roasted, Whole/Broken).

Similarly, data from the National Bureau of Statistics showed that in the first quarter of 2024, export of agricultural products was dominated by ‘Sesamum seeds’ valued at N247.75 billion, ‘Superior quality Cocoa beans,’ with N230.85 billion and ‘Standard quality Cocoa beans’ with N140.09 billion.

Further analysis showed that ‘Sesamum seeds’ worth N83.29 billion and N58.04 billion were exported to China and Japan, respectively while “Superior quality Cocoa beans, worth N112.00 billion and N48.28 billion were exported to The Netherlands and Malaysia respectively. Whereas; ‘Standard quality Cocoa beans’ worth N58.29 billion and N37.77 billion were exported to The Netherlands and Malaysia, respectively.

Olowo also disclosed that the FRC has also concluded talks with the Minister of Agriculture and the Minister of Environment, where they made very loud pronouncements and got good buying from corporate Nigeria to boost exports and increase foreign exchange earnings.

Enumeration achievements, Olowo said the council has achieved the full adoption of the international financial reporting standards, amendment of the FRC act, establishment of two new directorates and implementation of the 2020 Audit regulations among others.

In his speech, the committee chairman said its members were on the oversight function to ensure a safe and adequate environment for foreign investments.

“The House of Representatives through the various committees is to ensure the achievement of the noble goals of this administration.

“The committee is ready to ensure an ecosystem where the ease of doing business is critical and simplified and foreign direct investment is encouraged. The committee achieves this objective through oversight functions. The committee has designed a four-year strategy plan to foster a legislative framework that would be a robust climate resilience commerce that would grow the economy.”