Lagos — President of the Cocoa Processors Association of Nigeria, COPAN, Mr. Abimbola Oladapo has said that the suspension of the Export Expansion Grant and non-payment of two years N14billion arrears owed the processors under the scheme are threatening the cocoa industry in Nigeria.

Speaking at a press briefing in Lagos on Tuesday, Oladapo said the suspension of the EEG could kill the industry, and force 70,000 factory workers and 200,000 farmers, out of jobs.

The EEG is an export incentive that offsets 30 per cent of production costs suffered by exporters due to poor infrastructure.

Oladapo said the suspension was counter-productive, especially to the cocoa industry that employs several thousands of Nigerians, including resourceful but poor farmers.

"It is pertinent to state that with the present situation, foreign partners are beginning to develop cold feet and the survival of factories under construction is being threatened," Oladapo said.

According to him, the cocoa medium ginneries cost about N2 billion to N4 billion to set up.

He said the government of President Olusegun Obasanjo had put the EEG in place to encourage the growth of industries, which saw the emergence of new industries.

"For example, before the Obasanjo regime, we had four operational cocoa processing factories: however within eight years, three new factories were established and about five were refurbished,' he said.

Oladapo also said the failure of the government to sign free trade agreements with the African, Caribbean Pacific (ACP) could see exports from Nigeria trading at a disadvantage.

"Non-endorsement of the agreement by Nigeria means that every processed cocoa shipped from Nigeria will attract duty of 4.2per cent or about $250 per tonne," he said.

He said while the association would not compel the government to sign the agreement, there was need for government to put in place a price cushioning mechanism for operators.

The COPAN Secretary, Mr. Felix Oladunjoye, said there are 21 cocoa factories in the country with installed capacity of 266,000 tonnes.

He explained that value addition to products could enable Nigeria to earn more revenue and accelerate employment and wealth creation.