By Emmanuella Opara | November 5th 2026
KEY POINTS
- Nigerian cocoa processors pay EU duties of 6.1 per cent on cocoa paste and 4.2 per cent on cocoa butter, while raw cocoa beans enter duty-free.
- Ghanaian and Ivorian exporters enjoy duty-free access for similar processed products under separate trade agreements with the EU.
- The tariff difference could put Nigerian processors at a disadvantage of up to $200 per tonne.
- Nigeria has an installed cocoa processing capacity of 250,000 tonnes, but only five factories remain operational, processing about 20,000 tonnes annually.
- A proposed law requiring at least 30 per cent local value addition before raw materials are exported is still awaiting further legislative consideration.
MAIN STORY
Nigeria’s efforts to expand domestic agricultural processing are facing a trade disadvantage in the European Union, where tariffs on processed cocoa products make exports from the country less competitive than those from Ghana and Côte d’Ivoire.
Nigerian exporters pay duties of 6.1 per cent on cocoa paste and 4.2 per cent on cocoa butter entering the EU, while unprocessed cocoa beans are admitted duty-free. The arrangement places additional costs on local processors seeking to sell higher-value products in one of the major markets for West African cocoa.
The tariff difference could cost Nigerian processors as much as $200 per tonne, according to industry estimates. The burden comes on top of high electricity costs, logistics constraints, limited access to affordable financing and other operating expenses.
Ghana and Côte d’Ivoire have secured duty-free and quota-free access to the European market for their semi-processed cocoa products through separate interim Economic Partnership Agreements with the EU. Nigeria, however, has not signed the regional EU-West Africa Economic Partnership Agreement.
The competitive gap is affecting an industry that the Federal Government wants to develop as part of its broader effort to retain more value from agricultural commodities within the country.
Data from the National Bureau of Statistics show that Nigeria exported cocoa butter worth N69.2bn to Germany, the Netherlands, Estonia, France and Belgium in the first half of 2026. However, export earnings remain below the industry’s potential, given the country’s installed processing capacity and the challenges confronting local operators.
Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria, said the combination of import duties and high production costs had made it difficult for domestic processors to compete.
“The tariffs have left Nigerian value addition at a disadvantage to our competitors,” Oladunjoye said, adding that Nigeria still exports more than 80 per cent of its cocoa in raw form.
Akin Laoye, executive director of FTN Cocoa Processors Plc, also said the tariffs were reducing the competitiveness of local manufacturers. He questioned the level of consultation behind government decisions affecting the industry.
“We really don’t know who the government is consulting with,” Laoye said.
Nigeria is the world’s fourth-largest cocoa producer, behind Côte d’Ivoire, Ghana and Ecuador. It produced 315,000 tonnes in the 2022/23 cocoa season, according to the International Cocoa Organisation.
The European Union remains a major destination for West African cocoa, with Côte d’Ivoire, Nigeria, Ghana and Cameroon accounting for more than 70 per cent of its imports of cocoa and cocoa products, according to the European Commission.
The trade arrangement has also become a point of concern as the government pursues policies intended to increase domestic processing.
A proposed amendment to the Raw Materials Research and Development Council Act seeks to introduce a mandatory minimum of 30 per cent local value addition to raw materials before export.
The bill had passed the National Assembly and was sent to President Bola Tinubu for assent. However, after a presidential review, the House of Representatives recalled five clauses on November 3 for further examination by the Committee of the Whole. The proposed requirement has therefore not become law.
Oladunjoye said the country’s trade position was working against its domestic processing ambitions.
“The policy is working against itself,” he said. “We say we want to add value, but the trade status with the EU makes it cheaper to ship raw beans.”
The Federal Government has maintained that its objective is to encourage local processing rather than prohibit raw cocoa exports. In July, the Minister of Agriculture and Food Security, Abubakar Kyari, said exports of raw cocoa would continue while the government worked to expand domestic processing capacity.
Nigeria sends more than 70 per cent of its cocoa to the EU and the United States, according to the NBS. Calls to the Federal Ministry of Industry, Trade and Investment for an explanation of why Nigeria has yet to sign the regional trade agreement were unanswered.
THE ISSUES
The tariff disparity exposes a gap between Nigeria’s ambition to increase local value addition and the trade conditions facing its processors.
While Ghanaian and Ivorian manufacturers can export cocoa paste and butter to the EU without duties, Nigerian companies must factor additional charges into their prices. This makes it harder for them to compete for buyers, particularly when they are already dealing with high energy, transport and financing costs.
The situation also affects the country’s ability to retain more of the economic benefits from cocoa production. When raw beans are exported for processing elsewhere, the processing margins, associated employment and additional export earnings are generated outside Nigeria.
The proposed local value-addition requirement could increase pressure on processors if the cost of operating factories and accessing export markets remains high.
WHAT’S BEING SAID
“The tariffs have left Nigerian value addition at a disadvantage to our competitors,” Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria, said.
“We really don’t know who the government is consulting with,” Akin Laoye, executive director of FTN Cocoa Processors Plc, said.
“The policy is working against itself. We say we want to add value, but the trade status with the EU makes it cheaper to ship raw beans,” Oladunjoye said.
WHAT’S NEXT
The House of Representatives is expected to continue its examination of the five recalled clauses in the proposed amendment to the Raw Materials Research and Development Council Act.
The Federal Government also faces the challenge of addressing the trade conditions affecting processed cocoa exports, alongside the domestic constraints limiting factory operations.
The industry’s capacity to benefit from growing demand for processed cocoa products will depend partly on whether local manufacturers can secure sufficient raw materials, reduce operating costs and compete in export markets.
BOTTOM LINE
Nigeria’s cocoa value-addition drive faces both domestic production constraints and an external tariff disadvantage. Without improvements in market access and the operating environment, local processors may continue to struggle to compete with regional rivals, while much of the value generated from Nigerian cocoa is captured outside the country.
