International Trade Alliances and the Nigerian Cocoa Export, 1910-2010

Abstract

This paper examined Nigeria's participation in international trade since cocoa became a viable commodity for cultivation and trade. Cocoa exports initially received full financial support from the Nigerian government when large quantities were shipped to international markets before oil was discovered. Major historical epochs, such as the end of the World Wars, the crude oil boom, and the Structural Adjustment Programme, prompted countries around the world to pursue economic liberalisation, and the Nigerian government withdrew entirely from financing the agricultural sector. Cocoa export became privatised and was left under the control of private marketers who lacked the necessary infrastructure to properly handle exports to international markets. The study relied mainly on structured interviews and a questionnaire administered to 100 cocoa exporters in Nigeria. The exporters' companies were Criswel Equity, Woodgate International, Benade Commodity Enterprises, Olam Nigeria Limited, Olatunde Ventures, Jabfal Enterprises, and Batraco Nigeria Limited. Focused Group Discussions were also conducted with officials of the Cocoa Association of Nigeria (CAN), the Cocoa Processor Association of Nigeria (COPAN), and the Nigeria Institute of Internal Affairs (NIIA). Data were also gathered from printed materials such as books, journals, bulletins, conference proceedings, and seminars, as well as from the Internet. The data collected were interpreted from a historical perspective. Findings showed that Nigerian cocoa exporters have been penalised by the World Trade Organisation for violating export rules. A new trade agreement was drafted, and Nigeria refused to sign. The refusal led to the imposition of another penalty, which attracted a 10 per cent tariff on cocoa exports from Nigeria. Nigeria, in turn, imposed a 10 per cent tax on its cocoa exporters. The paper concluded that cocoa exporters hope to retain their export position, and stakeholders were sensitised on the need for readjustment to maximise international trade benefits.