Adding flavour to Nigerian exports

With oil its main source of foreign currency, Nigeria is keen to diversify its export base. Cash crops such as cocoa are a key element of this drive, but they must make the vessel as planned, every time.

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The 2,000 people of the Olora Community are all involved in farming. Photo: Tom Lindboe

Enabling West African trade

  • In 2014, Nigeria overtook South Africa as Africa’s largest economy. A statistical revision saw its 2013 GDP jump to USD 509 billion – well ahead of South Africa’s, which until then was the continent’s largest at USD 350 billion.
  • Nigeria is committed to also becoming one of the world’s top 20 economies by 2020, and expanding trade with other countries is an important part of its growth strategy.
  • Maersk Line’s deployment of 22 WAFMAX vessels in 2012 underlined its commitment to this market, including Nigeria. With a capacity of 4,500 TEU (twentyfoot equivalent units), the vessels, specifically designed to service West African ports, are the largest in the region.
  • Most of the cargo carried on these ships originates in Asia, making WAFMAX vessels an important element in the infrastructure needed to handle the expanding trade between Asia and West Africa.

“We also grow other things, but we focus more on cocoa because of its profitability,” explains Chief Akanmu Akinsumbo of the Olora Community, a farming collective in rural Nigeria.

Located about 150 km north of Lagos and another couple of kilometres down a dirt road after the paved section ends, the Olora Community’s entire population of 2,000 is involved in cocoa farming. The local school is the first thing you pass when you pay the Olora Community a visit. Export revenue from cocoa farming has not only paid for the school, but also for additional teaching capacity.

“We want our children to be better enlightened. We want them to be able to go abroad and we know that all this can start with the school. It is good for someone to be educated, and we also hope this will give us an edge in the marketplace,” Chief Akinsumbo adds.

On time, every time
During the peak season, Saro Agro-Allied, an agro-commodity exporter, drives to the village every week to pick up cocoa by the tonne, before processing it and preparing it for export.

Last year, all of the 1,200 containers of cocoa that Saro Agro-Allied exported out of Nigeria left on Safmarine vessels, an unusual exclusivity that is not lost on Maureen Ogadi, Safmarine’s export manager for West Nigeria.

“It is a real vote of confidence, and it translates into big demands on us. Being a cash crop, cocoa must make the vessel as planned, every time. So we have to have built-in layers, and there are a lot of extra processes to follow to make sure that happens,”
she says.

Agriculture as a business
Seeking to diversity its export revenue, of which oil accounted for 90% in 2012 according to the World Bank, Nigeria is looking to agro-commodities. Aided by booming demand, cocoa is a real success story, with 2013 exports reaching USD 1.2 billion out of total non-oil exports of USD 3 billion. Last year’s cocoa export is expected to reach a value of USD 1.5 billion.

“The key thing for these agro-commodities is to make sure that people find it profitable,” says Professor Ndubisi I. Nwokoma of the University of Lagos. “Therefore, the government has taken steps to convince people to see agriculture as a business, not just something for people who cannot find jobs elsewhere.”

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Exports in a nutshell

  • 90% of Nigeria’s export revenue in 2012 came from oil.
  • All of the 1,200 containers of cocoa that Saro Agro-Allied exported out of Nigeria left on Safmarine vessels.
  • With 2013 exports reaching USD 1.2 billion out of total non-oil exports of USD 3 billion, cocoa is a real success story.
  • In 2014, the cocoa export is expected to reach a value of USD 1.5 billion.

A partnership between Saro Agro-Allied and the Olora Community aims to increase the production further, as the exporter supplies fertiliser and other yield-enhancing techniques.

"Increased production comes through the farmers, and we believe in synergies. So we work with farmers to increase their yield. That benefits us as well as the farmers, who get a substantial part of the revenue," says Monday Awulu, Managing Director at Saro Agro-Allied.

Hungry for more

The Olora Community is keen to increase its cocoa production. The income can make a real difference for them, as Chief Akanmu Akinsumbo explains.

"The school we constructed was built with mud, so we hope to build a cement school building with blocks. We also want an antenna because the network in the community is poor, and a good hospital. When this happens, that is when we'll know that the cocoa business has done well for us."

Increased production comes through the farmers, so we work with them to increase their yield. In Nigeria, farmers get a substantial part of the cocoa proceeds, so the increase in production is reflected in their livelihoods.

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MONDAY AWULU, MANAGING DIRECTOR AT SARO AGRO-ALLIED

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The local school. Export revenue from cocoa farming has not only paid for the school but also for additional teaching capacity at the Olora Community, a farming collective in rural Nigeria. Photo: Tom Lindboe