Ayodeji Balogun, the Country Manager of AFEX Commodities Exchange Ltd., has decried the declining yields of the current cocoa value chain following neglect of the commodity.
Mr Balogun made this known on Monday in Lagos during an agricultural forum on the potential of cocoa as the future of export markets in Nigeria.
AFEX provides innovative solutions for Nigeria's agricultural sector and an alternative asset class for investors.
The company was established in 2014 to create a warehouse receipt system that provides secured storage for grains to serve as collateral for farmers to access finance.
The commodity company was part of Africa Exchange Holdings founded in 2012 to develop inclusive capital markets in East and West Africa and improve storage and food security systems.
Mr Balogun said cocoa, if fully harnessed, would become the second largest foreign exchange earner for Nigeria next to crude oil, and was until the mid-80s the highest earner.
The country manager said Nigeria was formerly the largest exporter of cocoa, lamenting that the present production had reduced to just a fraction of the quantity produced two decades ago.
According to him, cocoa remains Nigeria's leading agricultural export with Nigeria being the fourth largest producer of the commodity and the third largest African exporter.
"Although these statistics of cocoa still seem favourable, they become a sad story when considered through the lenses of our history.
"Cote D'Ivoire, which now stands as Africa's largest exporter of the commodity, has in comparison increased its output by over five folds.
"Nigeria dissolved the cocoa marketing boards in 1986; a move intended to give way for the liberalisation of the trade and marketing of cocoa.
"The unstructured transition from a state led monopoly to a liberalised private sector driven sector led to the weak and inefficient value chains that we have today in Nigeria," he said.
"When you dissolve a marketing corporation and you nurture private enterprises and build regulatory capacity, then you can liberalise trade and create a new industry.
"That was not what Nigeria did in 1986. What was done was an abandonment of our responsibilities, and we still suffer that toll today," Mr Balogun said.
The country manager said the current cocoa value chain in Nigeria was defined by declining yields per hectare with ageing cocoa trees requiring a national intervention to incentivise farmers, researchers, exporters and processors to take steps to rejuvenate the industry.
Mr Balogun said that the power imbalance between the producer and buyer of cocoa must be reversed, and tilted in favour of the producer.
"I see an increase in value appropriated by the producer from the current five per cent of global chocolate trade value to somewhere between eight and 10 per cent.
"That will put more food and more children in school for over 50,000 households in West Africa and this can only be achieved through the introduction of commodities exchanges in the country of origin.
"When we trade our cocoa from West Africa on our future exchanges, the world will be forced to buy through it," he said.
Mr Balogun said that there was need to focus on cocoa at the highest level of policy to gain its attendant benefits of inclusiveness and wealth creation.
He pledged to provide secure storage through AFEX operated warehouses to enable farmers to access finance, inputs and issue forward contracts to cocoa producers on the CBN Anchor Borrowers Programme.