The Road to the SDGs

output for the industry is growing significantly, suggesting that the local market is thriving. While the local content has increased over the years, there has been no change in the indirect value-add, indicating the potential to expand into new territories. X Petroleum, chemical and non- metallic mineral products follow the same patterns as the apparel industry, with strong potential for the local market. Products from all these industries can be used to build a thriving automotive industry. POTENTIAL IMPACTS X A preliminary case study, based on the information gathered via the GVC methodology, indicates the prospects for future development of the cocoa industry in Nigeria. The main points are as follows: X The cocoa industry is one of the key drivers of Nigeria’s agriculture, contributing 30% of agricultural products. X The industry employs 300,000 farmers directly and 2 million people indirectly. Although Nigeria is the 4th largest producer of cocoa in the world, the country’s current participation in world exports in this commodity is limited mainly to cocoa beans. X The overwhelming majority of cocoa exports are unprocessed. The country receives 30% lower cocoa prices than competing exporters because of lower quality beans. In general, the cocoa industry faces two challenges: – Farm-level constraints – Process-level constraints. X At the farm level, the system of sourcing quality inputs for farmers is limited. Poor road access, lack of post-harvest infrastructure and lack of irrigation are critical issues. X Other challenges include: – Skill gaps – Cost of finance – Segmentation of the industry into a large number of small farmers – Weak processing capacity – Unstable energy supply – Lack of storage facilities – Lack of skilled labour. X IsDB’s readiness assessment of the agricultural sector in Nigeria found the following key factors to be of greatest importance for the future development of the sector: – Access to finance – Sector competitiveness – Sector capabilities. X IsDB’s recommendations include: – GVC integration to help improve the country’s low competitiveness and poor productivity – Innovation and workforce qualification – Action to address lack of adequate training and technology adoption. INVESTMENT X IsDB’s recommendations for the cocoa industry include investment in improvements across the value chain, starting from inputs and extending to sales and distribution. These include: – Having the correct inputs delivered to farmers, especially access to quality seed – Disseminating farming best practices using farmer field school methodologies or extension services – Providing funding for mechanisation and the means to replace cocoa trees, which are vulnerable to pests and disease as they age – Developing and implementing training programmes to help smallholders gain certification – Improving value addition by promoting bean-to-bar branding strategies – Introducing agritourism (based on the value chain experience) as a second source of income for farmers – Enhancing farmer cooperatives – Using extension service – Partnering with lead firms to leverage access to the sector. X Suggested financial measures include: – Improving access to finance for the processing stage – Introducing trade financing mechanisms and other financing modes for processors – Reinstating the Export Expansion Grant scheme or a similar incentive structure to encourage origin grinding. N I G E R I A ’ S A G R I C U L T U R E The cocoa industry is one of the key drivers of Nigeria’s agriculture, contributing 30% of agricultural products and employing 300,000 farmers directly and 2 million people indirectly [ 245 ] T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S