Cocoa exporters in Nigeria have lamented that the recent Central Bank of Nigeria (CBN) strategy aimed at regaining back some of the foreign-exchange earnings lost to falling oil prices have led to delays in exports of cocoa beans and cashew nuts.
This development according to them is worsening the problem the apex bank is trying to solve.
This was made public over the weekend in a statement by the Cocoa and Cashew nuts value chains.
President of Cocoa Exporters Association of Nigeria, Pius Ayodele, in his view said, “It now takes an average of 40 days, instead of seven, to get approvals to clear a container for shipping.That’s after the Central Bank started insisting on additional documentation to ensure export proceeds are returned to the country.
“The oil-price plunge has worsened dollar shortages in Africa’s largest producer of fossil fuel. While crude contributes less than 10 per cent to Nigeria’s gross domestic product, it accounts for about 90 per cent of foreign-exchange earnings and half of government revenue.
“The shortage of hard currency is also adding to the gap between the official exchange rate and that on the parallel market. That spread, now more than 20 per cent, has created an incentive for exporters to divert dollar proceeds to unofficial channels.
The President of the National Cashew Association of Nigeria Tola Faseru also noted that “The slowdown in trade flows since October has caused a loss exceeding N500 billion ($1.3 billion) in non-oil revenue for exporters.
“Some traders have cash-flow problems and default on loans due to the gridlock at ports.
Recall that Nigeria is currently the world’s fifth-biggest producer of cocoa beans which is a major ingredient in chocolate. As Africa’s largest economy, it also fell into a recession last quarter.
Reports say about 100,000 tons of cocoa beans are trapped at the ports and another 100,000 tons of a variety of agricultural commodities are in warehouses around the country. And many exporters have lamented that it’s a struggle to get shipments out of the country, the 2020-21 cocoa crop in world’s fifth-largest producer of the chocolate ingredient could exceed initial estimates by as much as 27 per cent to reach 270,000 tons. Reduced production by global chocolate manufacturers adds to their problems.
While adding his view, President of the Cocoa Association of Nigeria, Mufutau Abolarinwa, noted that “Nigerian cocoa sellers are struggling to find buyers willing to enter into new forward contracts because many factories have shut operations because of the pandemic.
“International buyers are complaining of heavy stockpiles of unsold bean,” Abolarinwa added.