According to Leadership checks, Nigeria ought to earn no less than $4 billion (N2.4 trillion) per annum, from the exportation of cocoa and leather, so as to meet the country’s foreign exchange needs. This was revealed amidst the reality that over 95 percent of the industry’s 4.2 billion volume in 2021 was controlled by 200 non-oil exporters. Due to the issue of scarce forex facing the Nigerian economy, the country struggles to meet its foreign exchange needs, thereby depending on the Central Bank of Nigeria (CBN).
Nigeria is recorded as a leading player in the global cocoa industry and being the fourth largest producer, it covers 6.5 percent share of global production. A projection has estimated the growth of production to 4 percent per annum in following years. Also, by 700 million USD, the country is also the fourth largest exporter of cocoa beans worldwide. The climate in Nigeria encourages production and supply of cocoa beans from October to June, enabling the cultivation of 1.4 million hectares of farmland.
Cocoa should generate $3 billion annually instead of $1 billion.
At the 2022 annual conference of the Finance Correspondents Association of Nigeria (FICAN), with the theme “Boosting Domestic Capacity for Sustainable Export Earnings”, which was held during the weekend in Lekki, Lagos. Renowned economic and finance experts spoke on the current developments, stating that the exportation of leather is supposed to fetch the country an annual income of $1 billion. While cocoa export due to its higher value, should earn beyond leather’s annual income, fetching $3 billion annually.
The managing director of Fidelity Bank Plc., Mrs. Nneka Onyeali-Ikpe, represented at the event by Isaiah Ndukwe, emphasized that regardless of the fact that currently cocoa exports bring an inflow of $1 billion into the country per annum, there ought to be a three time increase to $3 billion with value addition. Also stated was the need for industrialization, so much that there is an addition of value to agro based products, with the export value rising by three times after value addition.
Nigerian leather industry can increase its earnings by 70%.
With Cocoa and Cashew as case studies, Onyeali-Ikpe said that a step forward in their value chain by changing from cocoa beans to cocoa butter or powder and from raw cashew nuts to kernels would accelerate foreign exchange revenues by no less than three times. Cocoa and cashew exportation income will be multiplied by three times the amount in the short term to medium term. However, if there is an improvement in the capacity of plantations and processing, the numbers can be moved exponentially.
Also, at the event, Ominiabohs Jermila, representing the Bank of Industry (BOI), said that the potential of exportation in the country is vast. Leather happens to be one of the non-oil export products that generated the most revenue in 2020. A study carried out by the Nigerian Economic Summit Group in 2021 also estimates that the Nigerian Leather industry has the capability to increase its earnings by 70 percent, generating more than $1 billion by 2025.
UBA facilitated about 31% of 2021 export volume.
The deputy Managing Director of the United Bank for Africa (UBA), Muyiwa Adeyemi, in his expression asserted that accountability for the 95 percent of the $4.2 billion is marked by 200 exporters. He affirmed that there was no large inclusion of informal exports in the wholesale trading in information, entertainment and solid minerals space that are unaccounted at the moment. It was further said that main items of non-oil exports such as cocoa, cashew, sesame seeds, hibiscus, fertilizers, tobacco, and hides and skins account for over 85 percent of total export, with UBA facilitating about 31 percent of the 2021 export volume.
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