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Cocoa Processors Seek FG's Intervention on Job Creation

19 Mar 2013

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Cocoa Framer

Crusoe Osagie


Cocoa Processors in the country, under the aegis of Cocoa Processors Association of Nigeria (COPAN), are seeking the critical policy intervention of the Federal Government in the sector, in order to create more jobs for Nigerians.


Speaking to journalists in Lagos, the Chairman of COPAN, Dimeji Owofemi, said it would be in the overall interest of the economy to ensure the realisation of the cardinal objective of job creation, which is a known major policy of all levels of government.


“We are told by Government of its desire to create 3.5 million new jobs and it is currently claiming to have created about 180,000 - 220,000 jobs. The implication of this is that the set target will take well over 50years to accomplish at this rate bearing in mind new births and new job seekers,” he said.


The Association urged government to further give advantage to value additions for better foreign exchange earnings and employment creations by removing incentives in form of Export Expansion Grant (EEG) to all exporters of raw agricultural commodities like cocoa beans without processing to semi and finished products.


The COPAN chairman explained that the 10 per cent EEG payment to exporters of raw commodities poses a disadvantage to manufacturing culture and employment generation in the country.


“Raw cocoa beans export is dangerous and inimical to agro-industrial development especially now that it is being highly rewarded by government; thereby exporting our own much needed jobs to European countries to keep their factories working at optimum capacity and sustaining their employment,” he said.


In particular, he noted that this was the right time to execute the various policy structures agreed upon especially the Cocoa Marketing and Trading Corporation (CMTC) that will drive the nation’s cocoa policies.

He disclosed that the estimated total direct investment in the eight factories in operation in the country today is put at about N27 billion and that of all the links in the cocoa value chain, processing is the most capital intensive; accounting for at least 90 per cent of the total direct investment in the cocoa economy.


He added that an average medium-sized Cocoa Processing Factory (10,000 metric tonnes capacity) requires a capital outlay of not less than N2 billion in plant and machinery and another minimum of N1 billion as working capital, as it employs about 200 direct and 1,000 indirect labour, and runs a 24 hour operation in three shifts.


He praised the federal government effort in succeeding to a noticeable extent in establishing the Export Expansion Grant (EEG) to cushion the effect of high cost of manufacturing in Nigeria by making the locally manufactured products more competitive in the international market.


However he pointed out some of the problems associated with processing and utilisation of the NDCC instrument due to restricted usage and the need to urgently review it to enhance its relevance to its objectives.


“The high incidence of re-financing cost due to extended EEG processing time after application is counter-productive. And the limitation of NDCC certificate to payment of customs import duties erodes the face value of the grant due to restriction by customs and high discounting rate of 24 per cent,” he said.


Owofemi lamented that the existing Nigerian Export Promotion Council (NEPC) policy whereby all beneficiaries of export grant produce Bank Guarantee of 50 per cent value of the NDCC value for one year before collection is making the whole scheme irrelevant even with the flexibility of a pledge newly introduced as an alternative.


“Also the presidency needs to gives directives to the Comptroller General of Customs to accept the NDCC certificates without conditions to enhance its value now that the seven per cent request by the customs has been granted,” he said.


He expressed the belief that COPAN’s expectations would receive attention of government at all levels in order to fast-track the transformation of the cocoa subsector as a major diversification and employment advancement of the Nigerian economy towards the desired growth-led path, under the principle of Public-Private-Partnership (PPP).


Tags: Nigeria, Featured, Business, COPAN, Cocoa Processors

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