Nigeria was once the world’s second-largest cocoa producer but now accounts for a mere 6 percent of global production, trailing West African neighbours like Côte d’Ivoire and Ghana and cocoa upstarts like Ecuador. This decline is largely a legacy of the 1970s oil boom that diverted national attention and investment away from agriculture and represents a profound missed opportunity. However, a proposed bill to establish the National Cocoa Management Board (NCMB) signals a crucial policy shift, one that, if executed competently, could help restore Nigeria’s cocoa leadership and secure sustainable livelihoods for millions of people in its value chain.
From the 1940s to the 1970s, cocoa was a major mainstay of Nigeria’s economy, contributing nearly 50 percent to national exports. This era was characterised by the robust support of regional marketing boards, notably the Western Nigeria Cocoa Marketing Board, which provided research, extension services, and price stability to smallholder farmers. The subsequent centralisation of these boards under military rule, along with other problems like bureaucracy, corruption, and a fixed pricing mechanism that failed to account for regional variations, stunted the growth of the industry. Farmers also faced the issue of delayed payments for their cocoa, underfunded infrastructure, and the unchecked spread of diseases like the swollen shoot virus that decimated production.
Source: Global Change in Data Lab, Vestance Analysis
The final blow, however, came in 1986 with the dissolution of the national cocoa board, ushering in a liberalised market devoid of coordination and support, leaving farmers vulnerable to price volatility and lacking access to credit, quality inputs, and modern farming practices. Today, Nigeria’s production hovers between 200,000 and 300,000 metric tonnes annually, a stark contrast to Ghana’s 700,000 and Côte d’Ivoire’s 1.8 million.
The proposed NCMB, as outlined by the Minister of Agriculture and Food Security, Abubakar Kyari, aims to rectify these historical failings. Its mandate is broad: to coordinate production and marketing, provide accessible credit to smallholder farmers, improve quality standards, promote domestic processing, foster regional cooperation, and encourage youth participation and climate-smart agriculture. These objectives are laudable and align with long-standing industry demands for stronger institutional support.
A well-run NCMB could deliver price stability, ensure quality standardisation for international markets, and incentivise local value addition. The last point is important, as Nigeria currently processes less than 10 percent of its cocoa locally, earning a mere $750 per tonne on raw beans compared to Europe’s $4,000 per tonne on finished products. A strong value chain is needed to help Nigeria extract more value from its cocoa and boost cocoa production while also moving us away from overreliance on selling raw cocoa beans to Europe with its ever stringent regulations. It is important that our long-term cocoa strategy should include transitioning the sector from being a mere price-taker to a more influential market player that produces and sells its own cocoa-based consumer goods, including chocolate and butter.
As Vestance’s recent report shows, the path to cocoa revival in Nigeria will not be smooth, and there will be challenges, particularly in the global cocoa market that is undergoing significant structural shifts. While demand, especially from Asia, is rising, stringent new regulations like the European Union Deforestation Regulation (EUDR) demand traceable and sustainably sourced cocoa. This regulation, requiring geolocation data and proof of compliance with environmental and social laws, poses immense challenges for Nigeria’s fragmented smallholder farmers, who often lack the financial capacity and digital infrastructure for compliance. The risk of market exclusion and financial penalties is real, contributing to recent price surges.
Meanwhile, Latin American producers like Ecuador and Brazil are aggressively moving up the value chain, investing in premium fine-flavour cocoa, certification systems, and robust local processing sectors, giving them a first-mover advantage in lucrative markets. If Nigeria continues to focus solely on exporting unprocessed beans, it risks being left behind, forfeiting substantial economic value and employment opportunities.
Nigeria can draw vital lessons from its West African neighbours, Ghana and Côte d’Ivoire, whose long-standing cocoa boards have achieved price stability and farmer support. Yet, their models are not without criticism. Fixed pricing mechanisms often lag global prices and disadvantage farmers during market booms, while bureaucracy and allegations of inefficiency and corruption have plagued both boards. Ghana’s COCOBOD, for instance, faced a $1.5 billion syndicated loan default in 2022, raising questions about its financial sustainability. Nigeria must avoid blindly replicating these models, but learn from them what works and what does not work. Or at least be aware of possible challenges and mitigate them.
For the NCMB to be truly transformative, it must adopt a hybrid governance model, balancing state oversight with robust private sector participation and genuine farmer representation. Its focus should be ecosystem coordination, not rigid price control. Instead of fixed seasonal prices, a flexible minimum price system that moves with global trends would offer both protection and upside for farmers. The board’s primary function must be to enhance Nigeria’s global competitiveness by addressing fundamental farmer needs: access to research, quality inputs, mechanisation, affordable credit, and improved farming practices. This requires prioritising partnerships with research institutions, facilitating digital and community-based extension services, and tackling infrastructural deficits like inadequate storage and poor rural logistics.
The NCMB must proactively align Nigeria’s cocoa value chain with international regulatory standards like the EUDR, develop national compliance frameworks and supporting farmers with traceability requirements. Technology must be embedded at its core, leveraging digital traceability, remote farm monitoring, and artificial intelligence (AI)-powered credit systems to enhance transparency and efficiency. Finally, legal safeguards, including mandated performance audits and direct oversight by the National Assembly, are essential to prevent regulatory capture and ensure the board remains focused on its core mandate of value chain development.
The establishment of the NCMB is a welcome and timely step. But its success hinges on learning from past mistakes and adapting them to present realities. A thriving Nigerian cocoa economy demands more than just a board; it requires a coordinated ecosystem of infrastructure, credit, research, data, market access, and robust oversight. Let’s get to work.
Ridwan Akeem works in research and policy for Vestance.
