Bank of Industry (BoI) has successfully secured €60 million in funding from the European Investment Bank (EIB) aimed at expanding Nigeria’s cocoa processing and dairy sectors.
This initiative aligns with the Nigerian government’s strategic efforts to reduce reliance on exporting raw agricultural products and instead promote local value addition.
Managing Director and CEO of BoI, Dr. Olasupo Olusi revealed the financing agreement during the Africa Cocoa Summit held in Abuja.
The summit, organized by the Federal Ministry of Industry, Trade and Investment, brought together officials and industry stakeholders from Nigeria, Ghana, Côte d’Ivoire, and Cameroon to explore ways to increase local cocoa processing and enhance value addition before export.
The €60 million loan forms part of a broader €85 million financing package jointly provided by the EIB and BoI, supported by the European Union’s Global Gateway initiative. The funds will be directed towards strengthening Nigeria’s cocoa and dairy value chains, with a focus on boosting local processing capabilities, ingredient production, and chocolate manufacturing.
Dr. Olusi emphasized that this funding is critical to BoI’s mission to accelerate industrialization, expand manufacturing capacity, and generate employment by retaining more value within Nigeria’s agricultural sector.
The summit concluded with the signing of the Abuja Declaration, which established the Cocoa Value Addition Alliance (CVAA). This regional platform aims to reduce Africa’s dependence on raw cocoa exports by promoting domestic processing and branding efforts.
Representing President Bola Tinubu, the Minister of Agriculture and Food Security, Senator Abubakar Kyari, called on cocoa-producing African nations to prioritize value addition. He stressed the importance of transitioning from exporting raw cocoa beans to producing finished chocolate products to capture a larger share of the global market.
How this will impact local farmers and the economy?
The €60 million loan secured by the Bank of Industry (BoI) from the European Investment Bank (EIB) to boost cocoa processing and dairy sectors in Nigeria is likely to have several positive impacts on local farmers:
Increased demand for raw materials; as local processing and manufacturing of cocoa and dairy products expand, demand for raw cocoa beans and dairy inputs from local farmers will rise. This can lead to more stable and potentially higher incomes for farmers supplying these raw materials.
Better prices and reduced exploitation; with more value addition happening locally, farmers may benefit from improved pricing structures. Instead of selling raw produce at low prices to middlemen or exporters, farmers could gain from stronger local supply chains and better market access.
Easier access to improved inputs and technology; the focus on expanding production and processing capacity often comes with investments in agricultural inputs, training, and technology transfer. Farmers may receive better seeds, fertilizers, and farming techniques, which can improve yields and quality.
Job creation and economic opportunities; the growth of local processing industries can create jobs not only in factories but also in farming communities through increased demand for labor and services. This can improve livelihoods and reduce rural poverty.
Encouragement of sustainable farming practices; with greater emphasis on quality and value addition, there may be incentives for farmers to adopt sustainable and higher-standard farming practices, which can enhance long-term productivity and environmental sustainability.
Strengthened farmer cooperatives and alliances; initiatives like the Cocoa Value Addition Alliance (CVAA) may encourage the formation of farmer cooperatives and stronger collective bargaining power, enabling farmers to negotiate better terms and access financing more easily.
Summarily, this funding and focus on local processing can empower local farmers by increasing demand for their produce, improving income stability, providing access to better resources, and fostering sustainable agricultural development.
