Cocoa was first introduced to Nigeria in 1874. Nigeria became one of the top global producer of the commodity. In 1960 Nigeria became the second largest producer after Ghana producing about 200,000 metric tones on annual basis.
Most of the developmental projects in the then western region of Nigeria were financed from cocoa proceeds by the then western region government. However, the decline in production started with the advent of crude oil when most plantations were abandoned.
There is the need to revitalize- cocoa production in Nigeria because of the dwindling oil income. Not only this, there is the need to diversify the economy to create jobs and income opportunities for Nigerians in the face the global financial meltdown and the inability of income from oil to create jobs and wealth for majority of Nigerians.
Cocoa is one of the most exportable crops in Nigeria that can readily generate export earning to Nigerians. It is also an investment that will outlive the owners. The implication of this is that an investor in cocoa plantation will reap from the investment for the rest of his/her life.
The uses to which cocoa can be made is many. These include among others cocoa butter, cake and liquor. Cocoa products are used for beverage production and also cosmetics. Cocoa bye-products can also be used as organic fertiliser and feed for ruminant animals. So Far, from cocoa pod, only the cocoa beans are economically used.
The cocoa husk and the cocoa sweetens have been proved to be capable of a number of industrial processes such as the use of the husk in livestock feed and soap making, and that of sweeteners in manufacturing of jellies, Jams, Food ingredients, wines, sugary solution among others.
Requirement
Large expanse of land where the soil is deep, fertile, aerated and loamy in nature.
Sources of seedlings procurement is also very important. Alternatively, nursery may be prepared separately whenever the seed are pre-planted before transplanting them to the field. It can be grown either from seeds or vegetative breeding commercial plantings are mainly grown from seeds.
Other requirements are black polythene bags, farm implements, shading materials, wind breakers, abundant labour, chemicals (fungicide, Insecticides etc.), processing implements, qualified personnel, some growth hormones and drying facilities.
Market potential/project justification
The uses to which cocoa can be put to notwithstanding, the demand for cocoa is rising steadily and prices are good.
It is a good source of foreign exchange. For some time now, cocoa farmers in Nigeria have been smiling due to the boost in non-oil export, which resulted from the abolition of cocoa board by the Federal Government.
However, the demand for cocoa beans in the country both for export and domestic uses is in the excess of the supply. Moreover, the tonne of cocoa bean is now selling at 400 percent of the price some years back.
The recent Deregulation of the Economy by the Government of Nigeria has made cocoa production to gain a very tremendous popularity. This is because of boost given to the non-oils exports.
A lot of abandoned cocoa plantations located in some parts of Oyo State Ondo State and Ekiti State have been re-activated by their owners. Suddenly cocoa production is being seen as one of the major sources of foreign exchange earning!
The transformation agenda of the present government of the Federal Republic of Nigeria also has a lot of incentives for then establishment and re generation of cocoa plantations in Nigeria. This is an opportunity for forward looking investors to utilize. Establishment of cocoa plantation is a life investment in which the investor will continue to get the returns for life.
In view of the above, it has been identified that establishment of cocoa plantation is one of the investment opportunities for Nigerian Investors. Not only because of its foreign exchange potentials but also it is a life investment for its owners.
This project is strongly recommended for consideration by investors, investment houses and profit conscious companies, including government to create jobs and income for the Nigerian youths.
Financial implication
10 hectare plantation has been chosen as a hypothetical plantation for the purposes of this analysis. This has been estimated to cost about N13,100,000 broken down as follows:
1. Pre-Investment N100,000
2. Land Acquisition 10 ha @ N500,000/ha: N5,000,000
3. Land preparation 10 ha @ N100,000/ha: N1,000,000
4. Procurement of seedlings 50,000 @ N100: N5,000,000
5. Planting and other expenses @ N200,000/ha: N2,000,000
Total N13,100,000
Note: The scope can be higher or lower depending on the financial strength of the prospective investor.
Projected revenue
A well maintained cocoa plantation will yield a minimum of 2 tonnes of dry seeds per hectare per year starting from the forth year. This translates to 20 tonnes for 10 hectares.
The current selling price of cocoa is N1,400,000 (minimum per tonne).
An annual income of N28 million can be generated from this project with operating expenses put at N10 million per annum. Investors will be making over N18 million on annual basis from the forth year for life. Serious minded investors can be assisted in the actualization of this project. Author’s contact: email: [email protected].
