Nigeria Targets $4bn Annually From Leather, Cocoa

Nigeria is expected to earn as much as $4 billion(N2.4trillion) annually from the exportation of cocoa and leather, in order to meet foreign exchange needs of the country, LEADERSHIP checks reveal.

This is even as the top 200 non-oil exporters controlled over 95 per cent of the $4.2 billion of the industry volume in 2021.

Nigeria has struggled to meet its foreign exchange needs, heavily relying on the Central Bank of Nigeria(CBN) for intervention in an economy facing scarce forex.

Speaking on this development at the 2022 annual conference of the Finance Correspondents Association of Nigeria (FICAN) themed “Boosting Domestic Capacity for Sustainable Export Earnings” which was held in Lekki, Lagos, at the weekend, renowned economic and finance experts, stated that the leather exports is expected to bring in an annual income of $1 billion annually while cocoa export with value addition can bring in $3 billion annualy.

On her part, the managing director of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, who was represented by Isaiah Ndukwe, at the event, noted that, although the cocoa exports currently bring an inflow of $1 billion into the country, this is expected to rise three time to $3 billion with value addition.

Noting the need to industrialise such that value is added to agro based products, she said, the value of exports rise by three times when value is added. Using Cocoa and Cashew as examples, she said, a step forward in the value chain moving from cocoa beans to cocoa butter or powder and moving from raw cashew nuts to kernels, moves foreign exchange revenues by at least three times.

“At three times increase in revenue, Nigeria can move cocoa exports to $3 billion per annum from the figure of about $1 billion and cashew to $600 Million, currently about $200 million in the short term to medium term. If we then doubled the capacity of our plantations as well as processing capacity, we can exponentially move the numbers.”

Representing the Bank of Industry (BOI) at the event, Ominiabohs Jermila, noted that, the export potential of the country is vast.

According to her, finished leather, for instance, was one of the non-oil export products that generated the most revenue in 2020.

“In a study carried out by the Nigerian Economic Summit Group in 2021, it was estimated that the Nigerian leather industry has the potential to increase its earnings by 70 per cent and generate over $1 billion by 2025. However challenges with standardisation and quality continue to affect the performance of Nigerian manufacturing on the international market,” she stressed.

On his part, the deputy managing director, United Bank for Africa(UBA), Muyiwa Adeyemi, speaking at the event, noted that, only 200 exporters were accountable for 95 per cent of the $4.2 billion Nigeria earned from non-oil export in 2021.

According to him, the $4.2 billion recorded in 2021 did not include informal exports largely in the wholesale trading in information technology, entertainment and solid minerals space that are currently unaccounted.

He disclosed that, “major items of non-oil exports includes cocoa, cashew, sesame seeds, hibiscus,fertilizers/chemicals, tobacco, hides and skin accounted for 85 per cent of total export” adding that UBA “facilitated $1.34billion about 31 per cent of the non-oil export volume in 2021.