
Greg Odogwu
| credits: File copy
| credits: File copy
Thinking
about the troubles bedevilling our country often brings tears to my
eyes because, considering the humongous natural and human resources we
are blessed with, we do not have any excuse being in the socio-economic
mess we have found ourselves now. Take unemployment, for instance; our
cocoa industry has the potential to employ millions of Nigerians and
also create economic spin-offs, which would in turn provide employment
for other millions. But sadly, this is not so. Over the years,
successive governments have killed the industry with bad policies, weak
vision and deliberate corruption and cooperation with external vested
interests.
Nigeria is the fourth-largest producer of
cocoa beans in the world, behind Cote d’Ivoire, Ghana and Indonesia.
After petroleum, cocoa is the country’s most important export – before
independence, cocoa generated about 90 per cent of Nigeria’s foreign
exchange earnings. Today, about 300,000 to 350,000 tonnes of cocoa are
produced every year, but more than 96 per cent of this is exported. This
looks good on the surface; but when one looks deeply, the Nigerian
government’s policy on cocoa export is killing our economy. Secondly,
the government’s deliberate discouragement of small businesses in
cocoa-based manufacturing brutally hit the cocoa industry.
Export is good but when it is only
empowering foreign businessmen while taking away jobs from Nigerians,
then it should be reviewed drastically. Experts in the industry have
constantly raised the alarm over government’s continued incentives to
cocoa exporters, as opposed to cocoa processors. It is interesting to
note that almost all the cocoa exporting firms in Nigeria are owned by
foreigners.
According to Gbenga Osinaike, a cocoa
industry analyst, “From all indications, exporting raw cocoa is
indirectly helping the economies of the importing foreign countries’
economy. In most of the other countries where cocoa is produced, the
exporters of the produce are made to pay tax to the government; but in
Nigeria, government’s Export Expansion Grant on the commodity is as good
as subsidising exporters. Exporters of raw cocoa are receiving undue
government patronage. This trend, in a way, will only help to discourage
private efforts at processing and in the long run kill the nation’s
economy and keep our youths perpetually in the unemployment market.”
The truth is that the few Nigerians who
are in the business of cocoa processing cannot compete with the foreign
companies who take our raw cocoa to their country, process in their
factories and bring back to us as finished cocoa-based products like
chocolate. This is very much like the dilemma we all cry about today
bedevilling the petroleum industry; whereby we export our crude oil, and
then import it as costly refined products.
This trend has chased a lot of Nigerians
out of the cocoa business. One of the few still weathering the storm,
Mr. Dimeji Owofemi, said in an interview recently, “It will be enough if
the government stops giving incentives to those exporting the raw
material because the raw material is a core element. For instance, in
our industry, we don’t need any other raw material; it’s cocoa, 99 per
cent. The rest of the items in the finished product – milk and sugar –
are less than one per cent in value. So, the government needs to stop
giving incentives to us on the one hand and taking it back on the other
hand by giving incentives to those who have external factories because
the incentive being giving on raw beans export is incentive to external
factories. Those external factories are being protected by their own
countries through the imposition of taxes on the cocoa we have added
value to.”
The irony is that most of the cocoa-based
end products are labelled as contrabands in Nigeria, but the rate at
which they still find their way into our borders is alarming. A brief
trip to any ‘trendy’ local supermarket will illustrate this. This
therefore raises the question: “Is it, how porous is our borders, or how
weak are our policies?” And this can only be answered by the Nigerian
Customs Service, and the National Planning authorities.
The government must be practical. If our
170 million-population cannot be satisfied by the local cocoa-based
products, there are two options before us. Firstly, the government could
lift the ban, but tax the importation so severely that the foreign
firms targeting the Nigerian market would be forced to open factories in
the country, thereby boosting our economy. Secondly, the government
could totally ban importation of all cocoa-based products, and strictly
implement this, and then pump in funds and grants to Small and Medium
Scale businesses to develop a robust indigenous cocoa-based
manufacturing value chain.
This brings me to the other problem.
During the late 1990’s, the National Agency for Food and Drug
Administration and Control and the Standards Organisation of Nigeria
clamped down on Nigerian businessmen who were engaged in the so-called
‘mushroom manufacturing’ of packaged cocoa-based beverages. In those
days, the local markets were flooded with small sachets of ‘alternative
bournvita’. They came in several brand names: CocaMela, CocoVita,
MorningCoco, etc. They catered to the needs of the Nigerian masses many
of who could not afford the big cans of the established cocoa beverage
brands. Note that in those days, these big brands did not produce the
little sachets that are common in the market today. Then, it was either
you bought the big can or you could not ‘drink tea’. Therefore, a
beverage morning meal or ‘tea’ was a rich man’s breakfast.
The Nigerian government’s decision to
chase the small beverage producers out of the system effectively killed a
budding industry that would have solved two problems at one stroke. It
would create employment for the teeming youth population while
empowering them with the requisite knowledge to populate an emerging
production value chain. It would have also provided an easy market for
the nation’s cocoa raw material, and in turn catalysed a local cocoa
processing sub sector. To be candid, Nigeria had the opportunity to
become an industrial giant just like China which started out with this
kind of small holder business model. But we lost all this in an
overzealous drive by a visionless public service.
I personally interviewed one of the
frustrated beverage manufacturers. He graduated from a Nigerian
university in 1996; after the National Youth Service Corps, he decided
to become an entrepreneur and went ahead to learn how to package the
sachet beverage. He bought processed cocoa from Ondo State; and after
production, supplied his branded products in several parts of the
country. Before his second year in the industry, he had expanded his
one-room factory to a warehouse, and employed other 36 Nigerian youths.
NAFDAC supervised his brand, gave him a registration number, and
business was going well but not until the same government came up with
new, untenable, guidelines aimed at kicking them out of business. Many
of these entrepreneurs insist that the government was working in cahoots
with established beverage brands that felt threatened by the mass
reception of these mushroom brands by the enormous market existing in
this nation.
It does not take a professional
statistician to know the harm done to Nigeria by the policy. The youths
that were potentially disengaged from fruitful enterprise and
sustainable capacity can only be counted in the millions. The man I
interviewed is now a low paid civil servant; while he would have become
an international businessman by now, counting his millions and inventing
more job-creating ventures. There is no over-emphasising the fact that a
nation where everybody is dependent on the government to provide their
every need is headed for the rocks. No wonder, at the ongoing National
Conference, every Dike, Tolu and Haruna is out-shouting one another over
sharing of the nation’s resources. Assets that we are not even ready to
manage with wisdom and transparency. May God help my country.
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