Industry players in the sector have pointed out that it is crucial for the federal government to prioritize coffee, a lucrative agricultural product that could elevate foreign exchange revenue by more than $2bn every year. They underscored that strategic investments, modernized farming techniques, and implementing value-added processing methods are imperative to fully exploit the coffee industry’s immense economic advantages. It is believed that Nigeria has the opportunity to achieve significant financial benefits and promote job creation and sustainable agricultural development by fully tapping into its coffee sector. The Coffee market in Nigeria is projected to grow by 7.05% (CAGR 2023-2028) resulting in a market volume of US$100.6m in 2028.
By implementing appropriate measures, Nigeria could establish itself as a major player in the global coffee market, leading to economic growth and diversification. Nigerian coffee export numbers have yet to reach significant levels, amounting to less than one million bags on an annual basis. On the other hand, Ethiopia holds the title of Africa’s top coffee exporter, with forecasts suggesting a substantial production of 8.25 million bags, each weighing 60 kilograms, as reported by the United States Department of Agriculture. Researchers from the Cocoa Research Institute of Nigeria have revealed that coffee production and exports have experienced a huge decline throughout Africa.
Aging coffee trees among factors declining production.
The decrease, according to researchers was caused by some factors such as insufficiency in producing technological expertise on disease-resistant, high-yield coffee varieties, difficulties brought about by drought and climate change, the aging of coffee trees, insufficient agricultural methods due to ineffective extension services, and a decline in the worldwide coffee market, among various other concerns. Experts advised that Nigeria must promptly prioritize and allocate sufficient funding to the agricultural sector. Alhaji Salihu Imam, Chairman of the National Coffee and Tea Association of Nigeria, Oyo State, urged the Federal Government to take urgent measures by declaring an agricultural state of emergency.
He said CBN must ensure commercial banks offer low-interest loans, with a maximum of 2 percent annual interest, for farmers to enhance the production of agricultural products. It is said that cultivation of coffee by farmers is adversely affected by the elimination of fuel subsidies and fluctuations in exchange rates. Despite the intention to address economic issues, the removal of subsidies has regrettably resulted in diminished purchasing power, impacting both producers and consumers alike. Alhaji Imam disclosed that Oyo State was on the verge of embarking on extensive coffee production within the upcoming two to three planting seasons.
Banks urged to inject investment in coffee production.
To achieve this goal, the state has partnered with the Nigeria Export Promotion Council, and the West African Speciality Coffee Association. Imam further called on banks to inject investment on coffee production, guaranteeing a plentiful supply for both local industries and export trade. In order to include coffee as one of its supported commodities, the Nigerian Export Promotion Council has begun working together with many farmers who are involved as out-growers. Marcel Okeke, the chief economist of Zenith Bank, said it is crucial to adopt strategies that foster economic growth and reduce reliance on imported products.
Okeke asserts that a key factor in elevating the agricultural sector is to strengthen the security measures for farmers. He urged for a transition from traditional small-scale farming to the adoption of mechanized farming techniques, while also providing necessary assistance to farmers. He said funding should be allocated for Agricultural Research Institutes, offering low-interest financial aid to farmers, and extending governmental support in clearing to mitigate production expenses. He urged the state governments to shift their perspective towards coffee, recognizing its potential as a lucrative crop capable of enhancing the nation’s income.
Government intervention is crucial for coffee production growth.
Furthermore, he said the government should support coffee just as much as is seen with cocoa. With ongoing challenges in funding for farmers, government intervention is crucial for the growth and development of coffee production, cropping, and cultivation. Coffee, historically a significant export, offers greater sustainability and resilience to climate change compared to cocoa. It’s unfortunate that we are neglecting the potential benefits of coffee, he said. Okeke also recommended that the Federal Ministry of Agriculture devise a comprehensive framework specifically for coffee, aiming to assist coffee farmers and offering them financial aid, as obtaining funding is crucial for their successful participation in the global market.