By Simpson Global Media News Desk
Government Highlights Untapped Value in Cocoa Industry
Nigeria could be missing out on an estimated $2 billion in potential annual economic value from cocoa because too much of the industry’s potential remains outside domestic processing and manufacturing, the Federal Government has said.
The Minister of Agriculture and Food Security, Senator Abubakar Kyari, made the disclosure at the two-day Africa Cocoa and Coffee Conference held in Lagos on October 7 and 8, 2026. The conference was organised by the Cocoa and Coffee Farmers Alliance Association of Africa (COCEFAAA), in partnership with the Federal Ministry of Agriculture and Food Security and the Cocoa Research Institute of Nigeria (CRIN).
Represented by Ajayi Olutobaba, Deputy Director of Tree Crops at the ministry, Kyari called for a shift from dependence on raw commodity exports towards stronger domestic processing, manufacturing, research and value addition.
The government’s position is that Nigeria should earn more from each tonne of cocoa it produces by expanding the production of cocoa butter, liquor, powder and chocolate, while continuing to participate in international raw-bean markets.
The minister also highlighted the importance of rehabilitating ageing farms, improving planting materials, strengthening agricultural extension services and managing pests, diseases and climate-related risks.
The announcement places renewed attention on a longstanding challenge in Nigerian agriculture: producing valuable commodities does not necessarily mean the country captures most of the income generated from them.
Vanguard reported on October 9 that the minister estimated the potential value lost through inadequate value addition at approximately $2 billion annually. The figure represents the government's estimate of an economic opportunity, rather than a separately audited calculation of money directly lost from public revenue.
Source: Vanguard, October 9, 2026.
Why Processing Matters
Cocoa is an important agricultural commodity used in the production of chocolate, cocoa powder, cocoa butter and other food and industrial products.
Farmers generally harvest cocoa pods, remove the beans and carry out fermentation and drying before the beans enter the trading and processing chain. Further processing can turn the beans into ingredients used by food manufacturers, while more advanced manufacturing can produce finished products for retail markets.
Each stage can create different business opportunities, including farming, transportation, storage, quality control, processing, packaging, branding and distribution.
When a producing country concentrates mainly on selling raw commodities, many of the activities that create additional value may take place elsewhere. The producing country may receive income from the beans but capture less of the revenue generated through processing, manufacturing and marketing.
Nigeria’s government wants to increase the proportion of this activity taking place locally.
The approach would involve building a stronger domestic market for processed cocoa products, attracting investors into manufacturing and improving connections between farmers, processors and buyers.
However, moving further up the value chain is not simply a matter of constructing factories. Processing businesses require reliable supplies of suitable-quality cocoa, dependable power, working capital, skilled employees, access to markets and customers willing to purchase their products.
A factory that operates below capacity may struggle to cover its fixed costs, even when the country produces a valuable agricultural commodity.
The government’s stated ambition therefore involves both increasing the capacity to process cocoa and creating the commercial conditions that allow that capacity to operate profitably.
The conference brought together public officials, research institutions, farmers’ representatives and private-sector stakeholders to discuss these interconnected challenges.
Source: Vanguard.
Low Productivity Remains a Challenge for Farmers
Alongside processing, Nigeria must address the productivity of its cocoa farms.
Acting Executive Director of the Cocoa Research Institute of Nigeria, Dr Abiodun Adedeji, said Nigeria’s cocoa productivity remained between 250 and 300 kilogrammes per hectare annually, despite previous distributions of improved planting materials.
According to Vanguard’s account of the conference, the institute has distributed hundreds of thousands of cocoa pods and seedlings in earlier programmes, while the Federal Government has mandated it to produce and distribute one million improved hybrid cocoa seedlings.
Adedeji said better planting materials must be accompanied by stronger research, improved production practices and better prices for farmers.
The productivity challenge matters because processing factories need dependable supplies of beans. If yields remain low, processors may have to compete for limited supplies or source raw materials at prices that make their operations less competitive.
Low productivity also affects farmers’ earnings. A farmer cultivating a small plot may have limited capacity to absorb higher costs for labour, farm maintenance, transport and crop protection when the harvest is poor.
Improved seedlings can contribute to higher yields, but their performance depends on several conditions, including soil quality, weather, farm management, disease pressure and the age of the trees.
Farm renewal can require time and investment. Farmers may need to replace old or unproductive trees, manage young plants and wait before newly established trees begin producing commercially significant harvests.
That creates a financing challenge: the cost of rehabilitation can come before the benefits.
Agricultural extension services can help farmers make informed decisions about planting materials, soil management, pruning, pest control, harvesting and post-harvest handling. Access to suitable inputs and practical training is also important.
The government's proposed expansion of improved seedlings could support renewal efforts, but its impact will depend on the quality of distribution, the suitability of the varieties, survival rates after planting and the support available to farmers.
For the programme to make a measurable difference, the number of seedlings distributed should be assessed alongside the number successfully established, the productivity of the resulting farms and changes in farmers’ incomes.
Source: Vanguard, October 9, 2026.
Research Institute at the Centre of the Strategy
The Cocoa Research Institute of Nigeria has a central role in efforts to improve the country's cocoa industry.
Established in 1964, CRIN conducts research and development on cocoa and other tree crops within its mandate. Its work includes crop improvement, production practices, pest and disease management, research into product quality and the development of value-added uses.
The institute also supports the dissemination of research findings and capacity building for stakeholders.
Its responsibilities mean that it can contribute at different points in the cocoa value chain, from helping improve planting materials to supporting better production and processing practices.
Research into crop varieties can help identify planting materials suited to particular production conditions. Research into pests and diseases can help farmers reduce avoidable losses, while work on processing can improve the quality and usefulness of cocoa products.
For Nigeria to expand local manufacturing, research and industry need to work together. Processors require reliable raw materials, and farmers need to understand the quality standards required by buyers.
Research institutions can help bridge that gap by sharing information about production, quality requirements and appropriate technologies.
The government’s target of distributing one million improved hybrid seedlings will therefore require coordination between the institute, extension officers, state agricultural agencies, farmer groups and other relevant partners.
Monitoring is equally important. Clear records can help authorities establish whether planting programmes are reaching the intended farmers and whether the seedlings are surviving and improving farm performance.
CRIN’s mandate includes value-added research, making it relevant not only to farm productivity but also to the government's ambition to increase domestic processing.
Source: Cocoa Research Institute of Nigeria.
Africa Produces Cocoa but Captures a Smaller Share of Its Value
The challenge extends beyond Nigeria.
At the conference, COCEFAAA Global President and founder, Comrade Adeola Adegoke, argued that African cocoa-producing countries capture only a small proportion of the value generated by the wider chocolate industry.
Vanguard reported his assessment that Africa produces a large share of the world's cocoa but captures less than 10 per cent of its value. The report also quoted the minister as saying that Africa grows about 70 per cent of global cocoa while receiving only a small share of the value of a chocolate industry worth more than $130 billion.
These figures were presented by speakers at the conference and should be understood as their assessments of the wider value chain.
The central concern is that the economic benefits from cocoa are distributed across numerous stages, and producing countries do not necessarily receive the largest share simply because they grow the crop.
Countries that host major processing facilities, food manufacturers, distribution networks and consumer brands can capture income from activities beyond cultivation.
For African producers, expanding domestic processing could help create additional jobs and businesses. Potential opportunities include cocoa grinding, butter and powder production, confectionery manufacturing, packaging, logistics and the development of regional consumer brands.
But building a competitive industry requires more than keeping beans within national borders. Processors need to meet consistent quality requirements, manage production costs, secure distribution channels and compete with established suppliers.
Regional cooperation could also help African countries improve their negotiating position, share research and develop more efficient supply chains.
The conference called for stronger collaboration among cocoa- and coffee-producing countries in research, standards and engagement with international markets.
Such cooperation could help countries share technical knowledge and respond collectively to changes in consumer demand, sustainability requirements and trade rules.
Source: Vanguard.
Government Says It Is Encouraging Processing, Not Banning Exports
The push for local processing has previously generated public discussion about whether Nigeria intends to stop exporting raw cocoa beans.
In July, the Federal Government clarified that it was not pursuing a blanket ban on raw cocoa exports. Instead, the stated policy was to encourage more domestic processing while maintaining Nigeria's role as a reliable exporter.
In a statement published by the Federal Ministry of Information and National Orientation on July 17, Kyari said the government's objective was value addition, not an export ban.
The ministry said it wanted to create conditions that would encourage investment in processing, increase farmers’ incomes, create jobs and enable Nigeria to earn more from its cocoa production.
That distinction is important for farmers and exporters who depend on existing international buyers. Raw-bean exports can continue to provide a market while domestic processing capacity develops.
An abrupt restriction without sufficient local processing capacity could create difficulties for farmers if domestic buyers were unable to purchase the available harvest at competitive prices.
A gradual expansion of local processing could offer a different path: domestic factories would create additional demand for beans while exporters continued to serve overseas markets.
For that approach to work, local processors must be able to pay prices that allow farmers to maintain their farms and invest in future production.
The government’s message at the October conference was consistent with this stated position, emphasising value addition and investment rather than a ban on raw cocoa exports.
Sources: Federal Ministry of Information and National Orientation; Premium Times.
Private Investment Could Expand Processing Capacity
Private-sector investment is likely to be important if Nigeria is to increase the volume of cocoa processed domestically.
Processing facilities require substantial investment in equipment, buildings, utilities, storage, quality-control systems and supply-chain operations. Investors also need confidence that factories can obtain raw materials consistently and sell their products at viable prices.
Vanguard reported that Sunbeth Global Concepts was developing a processing facility designed to handle 70,000 metric tonnes, with completion expected the following year according to the company representative at the conference.
The reported project illustrates the scale of industrial investment that may be needed to expand local processing. Its ultimate contribution will depend on the facility's completion, actual operating capacity, the availability of cocoa and the markets secured for its output.
Such investments can create opportunities for farmers and service providers if they establish stable purchasing relationships and provide predictable demand.
A processing facility may also support employment in manufacturing, transport, equipment maintenance, quality assurance, warehousing and administration.
However, the benefits will not automatically reach every cocoa-growing community. The terms of purchasing agreements, quality standards, farm-gate prices and payment arrangements will influence how much value farmers receive.
Government policy can support investment through predictable regulations, infrastructure improvements, access to finance and efficient trade procedures. Private businesses, in turn, must demonstrate that their facilities can operate commercially and compete in local and international markets.
The long-term objective is not simply to announce factories but to establish a sustainable processing industry that purchases cocoa consistently, produces competitive goods and creates lasting employment.
Source: Vanguard, October 9, 2026.
Better Farm-Gate Prices Remain Essential
For farmers, the success of a value-addition strategy must ultimately be reflected in their livelihoods.
Cocoa cultivation requires investment in land preparation, planting materials, maintenance, harvesting, fermentation, drying and transportation. Farmers also face risks from adverse weather, crop disease, pests and fluctuations in international prices.
If processing expansion increases demand for beans but farmers do not receive fair and reliable prices, the economic benefits may be concentrated further down the supply chain.
Adedeji’s call for better farmer prices at the conference highlighted the importance of ensuring that production improvements and industrial growth work together.
A stronger cocoa industry could support farmers through reliable buying arrangements, transparent quality requirements, timely payments and access to agricultural advice.
Cooperative arrangements may also help smallholders aggregate their harvests, improve their bargaining position and access services that would be expensive to obtain individually.
Farmers can benefit when buyers communicate quality requirements clearly and provide practical guidance on fermentation, drying and storage. Consistent quality can reduce disputes and improve the ability of producers to reach more demanding markets.
Access to finance is another important consideration. Farmers may need credit to rehabilitate farms, buy inputs or cover household expenses between harvests. Appropriate financing arrangements could help them invest in productivity without becoming excessively exposed to debt.
A successful processing strategy should therefore be assessed not only by factory output or export earnings but also by whether it supports viable farm businesses and improves incomes for the people who grow the crop.
Climate Change, Pests and Ageing Farms
Nigeria's cocoa sector also faces production risks that can undermine attempts to increase output.
Climate conditions affect flowering, pod development, crop health and harvest timing. Changes in rainfall patterns and temperature can make production more difficult, while pests and diseases can reduce yields and damage the quality of harvested beans.
Ageing trees and insufficient farm maintenance can further limit productivity.
The agriculture minister called for stronger pest and disease management and climate-smart production practices at the conference, alongside farm renewal and improved planting materials.
For farmers, climate resilience may involve selecting suitable planting materials, improving soil management, maintaining farm shade where appropriate, monitoring pests and diseases and adopting practices recommended for local growing conditions.
These measures need to be supported by research and practical extension advice. Recommendations that work in one growing area may not be suitable everywhere, particularly where soils, rainfall and disease pressures differ.
The rehabilitation of ageing farms is especially important because distributing seedlings alone does not guarantee a sustained increase in production.
Farmers need the resources and technical support to establish new trees, maintain them during early growth and protect them until they become productive.
A more resilient supply of cocoa would benefit processors as well as farmers. Factories need predictable volumes and quality to plan production and meet customer commitments.
Climate-smart farming is therefore not separate from industrial development. It is one of the conditions required to build a dependable domestic processing industry.
Traceability and Access to International Markets
Cocoa exporters and processors must also respond to evolving expectations around the origin and production of agricultural commodities.
At the conference, Kyari highlighted traceability as an important means of protecting Nigeria’s position in international markets. Traceability involves keeping records that help establish where cocoa was produced and how it moved through the supply chain.
For buyers, such information can support quality assurance and help demonstrate compliance with applicable sourcing requirements. For producers and exporters, reliable records can improve visibility over supply chains and help them respond to customer requests.
The European Union's deforestation-related requirements have become a significant consideration for businesses supplying certain commodities to the European market, including cocoa. The precise obligations depend on the applicable rules, the products involved and the roles of the businesses concerned.
Preparing for such requirements may involve mapping production areas, maintaining reliable farm records, improving documentation and coordinating information among farmers, cooperatives, traders and processors.
Smallholder farmers may face difficulties meeting complex documentation requirements without support. Practical systems, training and suitable technology can help reduce the burden, provided they are affordable and appropriate for local conditions.
Traceability can also support domestic processing by helping manufacturers understand the origin and quality of their supplies.
However, records alone cannot solve all market-access challenges. Businesses must also meet applicable product-quality, safety and commercial requirements.
The broader objective is to ensure Nigerian cocoa remains competitive while producers and processors adapt to changes in international trade.
Source: Vanguard.
Turning Cocoa Into a More Attractive Business for Young People
The development of a stronger cocoa value chain could also create opportunities for younger Nigerians.
Agriculture is sometimes viewed primarily as cultivation, but a modern cocoa industry includes a wide range of businesses and technical careers.
These include farm management, agricultural research, machinery services, quality control, food science, processing, packaging, logistics, export management, digital traceability and marketing.
At the conference, Lagos State representatives emphasised the need to make agriculture attractive to young people by presenting it as a technology-driven business and career.
That approach could help connect young entrepreneurs with opportunities beyond traditional farm ownership.
For example, businesses could develop services for fermentation and drying, provide equipment to farmers, organise produce aggregation or create locally manufactured cocoa-based products.
The commercial prospects of such ventures would depend on market demand, operating costs, access to finance and the ability to maintain consistent product quality.
Training and mentorship can help prospective entrepreneurs understand these requirements before investing.
Young people could also contribute through digital services that support farm records, market information, traceability and supply-chain coordination.
For these opportunities to grow, agricultural development programmes must connect training with practical business support and reliable markets.
A thriving cocoa industry could generate employment across rural and urban areas, but the benefits will depend on the quality of investment and the sustainability of the businesses created.
What Happens Next?
The immediate challenge is to turn the government's renewed emphasis on value addition into measurable progress across farming, processing and trade.
That requires coordination among the Federal Ministry of Agriculture and Food Security, CRIN, state governments, farmers’ organisations, processors, exporters, investors and financial institutions.
The proposed distribution of improved hybrid seedlings will need to be accompanied by appropriate technical support and monitoring. Authorities will also need to track whether farm productivity improves and whether the programme helps farmers establish more productive plantations.
For processors, the key issues include securing dependable supplies, obtaining finance, maintaining competitive operating costs and developing markets for cocoa ingredients and finished products.
The private sector's role will be particularly important in determining whether new capacity becomes commercially productive rather than remaining underused.
Farmers will be watching whether stronger domestic demand translates into better prices and more reliable purchasing arrangements. Exporters will also need clarity about policy implementation so they can plan their businesses without unnecessary uncertainty.
At the regional level, greater cooperation on research, production standards and market access could help African cocoa- and coffee-producing countries strengthen their position in international trade.
The government has not established through the reported $2 billion estimate that this amount will automatically be recovered each year. Capturing more value will depend on the scale of investment, the performance of processing facilities, international demand and the competitiveness of Nigerian products.
Conclusion
Nigeria's cocoa industry has a significant opportunity to generate more value from an agricultural commodity the country already produces.
The Federal Government's estimate of $2 billion in potential annual value highlights the scale of the opportunity identified by officials, while CRIN's warning about low farm productivity shows why industrial expansion must be supported by stronger production.
Local processing could create jobs, encourage manufacturing, diversify exports and provide additional markets for farmers. But success will require more than new factories or seedling-distribution announcements.
Farm renewal, improved research, climate resilience, access to finance, fair farm-gate prices, reliable infrastructure and traceable supply chains will all influence the industry's performance.
The government's stated policy is to encourage domestic processing while continuing raw cocoa exports, giving Nigeria a potential route to expand value addition without abruptly removing existing markets.
Ultimately, the success of the strategy will be measured by whether farmers produce more efficiently, processors operate sustainably, Nigerian products reach customers and a greater share of the value generated by cocoa remains within the country.
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