Nigeria’s revenue loss and dollar shortage could worsen with fresh concerns from cocoa farmers and exporters on disruptions to their supply and distribution chain by COVID-19 restrictions.
Driving the news: Head of Nigeria’s cocoa association, Mufutau Abolarinwa, says restrictions on transportation and exports meant to slow the spread of COVID-19 have prevented farmers of the crop from meeting demand.
- An estimated 6000 tonnes of beans is stuck at the Lagos port and other warehouses in the country
- The lockdown – that’s now been eased – and interstate travel ban caused a distortion in transport and export activities. This created a backlog of orders for the crop and per Mufutau’s claims, April orders are still being processed.
- The crop shipments stuck at the port are racking up storage costs that will likely reduce profit margins.
Why it matters: This is a crucial harvest period for cocoa farmers in Nigeria. Between now and September, at least 50,000 tonnes of the crop are expected to be harvested and processed for local use and export.
- Nigeria is the world’s fifth-biggest cocoa grower and reported revenue of N103.8bn was earned from the export of the crop in 2018. The global market for cocoa is valued at $67.22bn.
- Failure to meet demand and poor storage facility could see the harvests of the farmers go to waste – and deny the country desperately needed foreign exchange following poor oil earnings.
- Agriculture is Nigeria’s biggest employer of labor and has been identified as a viable sector for the country to diversify its export trade in light of oil’s recent woes and projected unstable future.