Cocoa Industry in Crisis as poor funding, over taxation, others undermine sector

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The Cocoa Association of Nigeria (CAN) has attributed the decline of the cocoa processing industry to poor funding and an increasingly harsh business environment marked by over taxation. According to CAN President Mufutau Abolarinwa, the high cost of production in Nigeria has diminished the number of cocoa processing companies, and the industry requires government support.

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“We had a high number of cocoa processing companies in Nigeria in the past. Most of them are moribund. They are crashing because they cannot compete. They cannot function well. The existing ones are bleeding,” Abolarinwa said. He attributed the challenges to funding and high production costs, including power and other factors.

Abolarinwa also decried the over taxation of cocoa players by subnationals, stating that “for a processor to move cocoa from Ikom, Cross River State, to Lagos is so expensive. There are many agencies along the way, on the road. After you have paid your duly regulated fee to the Federal Government, state and local governments will introduce another fee.

The CAN president called for a holistic approach to solve the problem, recommending that the government harmonize taxes and fees charged to the industry. He also urged the Federal Ministry of Agriculture and the Federal Ministry of Industry, Trade and Investment to improve their support for cocoa farmers.

The recently approved National Cocoa Management Board (NCMB) initiative was welcomed by CAN as a “major development,” but the association emphasized the need for thorough implementation. Abolarinwa noted that “the question of forming the board is not Nigeria’s problem; implementation is.”

The CAN has urged the federal and subnational governments to step up their efforts to revamp the cocoa industry, citing the need for improved funding for the Cocoa Research Institute of Nigeria and support for cocoa farmers and processors

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