African Cocoa Giants Forge Alliance to Capture Global Value Chain Dominance

Nigeria, Ghana, and Côte d’Ivoire have solidified a strategic pact to transition from raw cocoa bean exporters to significant players in the global chocolate industry, aiming to capture a larger share of the estimated $165 billion market. This landmark agreement, reached at a high-level summit in Abuja, signals a decisive shift towards local processing and value addition, with profound implications for legal frameworks, investment strategies, and corporate governance across the continent.

Representing President Bola Ahmed Tinubu, the Minister of Agriculture and Food Security, Senator Abubakar Kyari, articulated the imperative for this transformation. He highlighted the stark reality that Africa, despite producing approximately 70% of the world’s cocoa, currently garners only about six cents of every dollar generated by the global chocolate industry. The remaining 94 cents, he noted, are accrued by entities in countries where cocoa is not cultivated, underscoring a historical imbalance that the new strategy seeks to rectify.

“The story of the cocoa bean is, in miniature, the story of our continent—blessed beyond measure at the root and shortchanged at the branch,” Senator Kyari stated, framing the initiative not as a lament but as a catalyst for change. He decried the existing division of labour, where African nations supply raw materials while processing, branding, and pricing occur elsewhere, leading to a situation where a tonne of exported beans is re-imported as chocolate at twenty times the initial price. This dynamic, he declared, constitutes “tribute,” an era now concluded.

Nigeria’s commitment to this value-addition agenda is underscored by its substantial cocoa cultivation, involving over 300,000 farming families across 1.4 million hectares. Cocoa has emerged as a critical non-oil export for the nation, generating over N3 trillion and accounting for nearly a quarter of non-oil export earnings when global prices surged. However, Senator Kyari pointed out that these substantial revenues were overwhelmingly derived from raw beans traded on international exchanges in London and New York, a reliance he likened to a “lottery ticket” rather than a sustainable economic strategy.

The Federal Government’s industrialisation agenda, under the Renewed Hope programme, places value addition at its core. Nigeria is actively expanding its local processing capacity, evidenced by the construction of a 70,000-tonne cocoa processing facility in Shagamu and an increase in national grinding capacity to over 120,000 tonnes annually. Each tonne processed domestically translates into job creation, enhanced economic value retention, and a more robust future.

The Abuja Declaration, to be signed by Nigeria, Ghana, Côte d’Ivoire, and Cameroon, is positioned as a pivotal commitment to reposition Africa within the global cocoa value chain. The ministers emphasised that collective action transforms these nations from price takers into a formidable market force. This accord is expected to facilitate coordinated policies, attract investment in processing and manufacturing, and elevate sustainability and traceability standards.

Senator John Owan Onoh, Minister of State for Industry, echoed these sentiments, lamenting the export of raw materials while value is captured elsewhere. He highlighted the economic drain of exporting anonymous sacks of beans only to import branded chocolate products at significantly higher prices. The collaboration aims to bolster industrialisation, improve access to superior farming inputs, expand financing opportunities, and enhance the overall competitiveness of Africa’s cocoa sector. Dr. Ransford Anertey Abbey, CEO of the Ghana Cocoa Board, welcomed the initiative, expressing confidence that regional cooperation will accelerate growth, improve farmer incomes, and maximise value retention across the continent.

… African Cocoa Giants Forge Alliance to Capture Global Value Chain Dominance … Naijaonpoint.