September 25, 2020 / 12:37 PM / By FDC Ltd / Header Image Credit: FDC Limited
Nigeria is likely to witness a sharp fall in its cocoa output in the 2020-21 harvest season due to excessive rainfall in the South Western states - predominantly in Ondo and Ogun. Early harvest of the main crop, which typically commences in September-October, has been halted as farmers express grief over the lack of sunshine to dry cocoa pods after being harvested. In addition, a possible outbreak of the black pod disease, which thrives during the wet season, is also a major threat to output.
The disease, if left unchecked could damage up to 40% of Nigeria's annual cocoa output. Cocoa is Nigeria's largest agric export commodity, accounting for 1.46% of total exports and 41.38% of total agric exports in Q2'20. Approximately 70% of the country's annual production (330,000 tons in 2018) of the commodity is grown in the South West. The major producing states are Ondo, Ogun, Osun, Ekiti and Oyo.
The anticipated fall in cocoa production at a time of dwindling oil prices would further put a strain on government revenue. It could also undermine the government's effort at achieving food security in Nigeria. In a bid to achieve food security and sufficiency, the CBN has directed banks to increase their exposure to the agric sector from 4% currently to 10%. The president has also directed the CBN to suspend forex for food and fertilizer imports.
Increased credit allocation to the agric sector is expected to provide huge support to the sector, improve productivity and boost domestic output. The expected boost in food production will reduce food imports and lower food prices. Nigeria's food import bill currently stands at $20 billion annually. Specifically, increased access to funds could avail cocoa farmers the opportunity to put in place the necessary storage and drying facilities, which will help to guard against subsequent shortfalls in output.