Business
BOI to channel 70% of €85m EIB facility to drive Nigeria’s cocoa, dairy sectors
Nigeria’s foremost development finance institution, the Bank of Industry (BOI), has secured a €60 million credit facility from the European Investment Bank to fund Nigeria’s cocoa and dairy value-addition drive, with a focus on processing, ingredients, and chocolate manufacturing.
The Managing Director/CEO of BOI, Olasupo Olusi, disclosed this on Tuesday, during the Africa Cocoa Summit convened in Abuja by the Federal Ministry of Industry, Trade and Investment.
With the summit, the ministry aims to transition Africa from exporting raw beans to local processing and branding.
Also known as the Cocoa Value Addition Summit, with the theme ‘From Bean to Brand,’ it was attended by leaders and stakeholders from Nigeria, Ghana, Côte d’Ivoire, and Cameroon, who signed the Abuja Declaration to establish the Cocoa Value Addition Alliance (CVAA).
According to Mr Olusi, the €60 million forms part of the €85 million EIB–BOI facility, backed by the European Union under the Global Gateway initiative, and designed specifically to strengthen these critical sectors in Nigeria.
The BOI chief said the cocoa value chain initiative provides livelihoods for thousands of Nigerians, aims to enhance productivity, value addition, and market linkages that will directly improve the incomes of farmers and processors in the country.
“This agreement reinforces the Bank of Industry’s commitment to unlocking long-term, affordable finance for priority sectors that drive inclusive growth.
“Approximately 70 per cent of the €85 million financing facility will be channeled to Nigeria’s cocoa and dairy sectors, which BOI considers among the industries with the greatest potential to create jobs and retain foreign exchange earnings.”
“We are particularly focused on cocoa value chains, which provide livelihoods for thousands of Nigerians. Through this initiative, we aim to enhance productivity, value addition, and market linkages that will directly improve the incomes of farmers and processors,” Mr Olusi said.
The BOI MD said that the bank would prioritise lending to processors, cooperatives, and MSMEs that add value locally, rather than only to traders exporting raw beans.
He added that the era of celebrating volume of raw exports must end, as Nigeria loses billions by shipping beans and importing finished chocolate.
According to him, the goal is to create factories around cocoa communities so that value, jobs, and taxes remain in Nigeria.
Technical assistance
However, Mr Olusi noted that financing alone is not enough, and as such, BOI will complement the loans with technical assistance on compliance, climate standards, and access to the EU market.
BOI, he said, will also support farmers and processors to meet the EU Deforestation Regulation and other international environmental and social standards.
Citing BOI’s track record, Mr Olusi said the bank disbursed over ₦164 billion in 2025 to more than 3,500 agro and food-processing businesses.
The support financed factories, mills, packhouses, and cold chains, and linked nearly 48,000 smallholder farmers into industrial value chains, he stated.
The BOI boss said the new financing would target the entire ecosystem, from nurseries and farmer cooperatives to grinding plants, ingredient factories, packaging lines, and chocolate manufacturers.
Cocoa value addition
Speaking also at the summit, President Bola Tinubu, who was represented by the Minister of Agriculture and Food Security, Abubakar Kyari, called for a decisive shift from Africa’s long-standing dependence on exporting raw cocoa beans.
Mr Tinubu urged the stakeholders of the producing countries to prioritise value addition and capture a larger share of the global chocolate industry’s wealth.
He noted that although Africa accounts for about 70 per cent of global cocoa production, the continent retains only six cents of every dollar generated by the global chocolate industry.
Mr Tinubu stressed that Nigeria was committed to processing more of its cocoa locally, expanding chocolate manufacturing, building indigenous brands, and competing more effectively in international markets, rather than continuing to export raw cocoa beans.
According to the president, cocoa value addition remains a key component of his Renewed Hope Agenda and the country’s broader industrialisation strategy.
He further disclosed that investors are developing a 70,000-tonne cocoa processing facility in Shagamu, Ogun State, while Nigeria’s cocoa grinding capacity has already surpassed 120,000 tonnes annually.
One-trillion-dollar economy
Earlier at the summit, the, Minister of Industry, Trade and Investment, Jumoke Oduwole, said the summit aligns with the Federal Government’s ambition of building a one-trillion-dollar economy by 2030.
She observed that despite Nigeria’s significant contribution to global cocoa production, the country continues to earn only a small fraction of the value created across the cocoa value chain.
According to Ms Oduwole, the FG is promoting greater value addition through manufacturing incentives, inves,tment promotion and stronger collaboration among relevant institutions.
The minister added that the government would also deepen market access by leveraging existing trade partnerships and opportunities under the African Continental Free Trade Area (AfCFTA), while encouraging investors to take advantage of regional and global value chains to unlock the sector’s full economic potential.
Cocoa Value Addition Alliance
Also speaking, the Minister of State for Industry, John Owan Enoh, described the summit as another milestone in implementing Nigeria’s Industrial Policy, and announced plans for the establishment of the Cocoa Value Addition Alliance, b,ringing together Nigeria, Ghana, Côte d’Ivoire and Cameroon, countries that collectively account for about 75 per cent of global cocoa production.
READ ALSO: Bank of Industry hands over 30-room hostel to Nigerian university
According to Mr Enoh, the alliance is designed to strengthen regional cooperation, promote local processing, and enable producing countries to capture greater value from the global cocoa market.
“We are not here to disrupt existing partnerships but to expand them,” the Minister of State for Industry, Mr Enoh, said.
He urged African cocoa-producing nations to move beyond exporting raw beans and instead focus on developing branded cocoa products capable of competing successfully in global markets.
On his part, the Chief Executive of the Ghana Cocoa Board (COCOBOD), Ransford Abbey, urged African cocoa-producing countries to deepen domestic processing.
“I am here to support the effort and commit to a joint effort towards increasing value for our hardworking cocoa farmers and our respective economies,” Mr Abbey said.
He said Africa produced about 75 per cent of the world’s cocoa but earned less than 10 per cent of the global chocolate industry’s wealth.
“This system cannot continue. We must shift the paradigm from exporting raw poverty to creating refined wealth right here on ,the African continent,” he said, adding that stronger regional collaboration, investment, and technology transfer will help African countries capture greater value from the global cocoa economy.
The Head of Cooperation of the European Union Delegation to Nigeria and ECOWAS, Massimo De Luca, reiterated the importance of value addition in the cocoa value chain.
While expressing the support of the EU, Mr De Luca called on governments of the various countries to ensure they play their part in ensuring that a proper framework necessary for the success of the initiative was established and clarified.
The International Monetary Fund (IMF) said targeted, temporary income support is the most effective and cost-efficient way for governments to protect vulnerable households during cost-of-living crises.
IMF disclosed this in its latest World Economic Outlook, noting that broad-based subsidies can impose higher costs on public finances.
The IMF report examined the economic consequences of cost-of-living crises and the effectiveness of government interventions across 76 countries over three decades.
The financial institution said consumer subsidies could require three to six times more fiscal resources than targeted cash transfers to provide the same level of protection to lower-income households. In contrast, producer subsidies could cost 14 to 22 times more.
According to the lender’s report, disruptions to global commodity markets, including those following Russia’s invasion of Ukraine in 2022 and conflicts in the Middle East, have driven up prices for essential goods and services such as food and energy.
The IMF said these episodes often have lasting consequences beyond the initial price surge. It said this makes essentials more expensive relative to other goods, weakens household purchasing power, and complicates central banks’ efforts to control inflation.
“Inflation expectations also rise and stay above pre-crisis levels for years, suggesting that these episodes may complicate efforts by central banks to control inflation,” the report said.
It added that real wages could fall and remain below their previous levels for an extended period.
The Fund explained that poorer households bear a disproportionate share of the burden because food and energy make up a larger share of their spending than they do for wealthier families.
It noted that the effects on poverty and inequality were severe in lower-income countries, where necessities account for an even larger share of poor households’ expenditure.
Subsidies carry higher fiscal costs
The IMF said governments often responded to cost-of-living pressures with broad-based measures to suppress price increases, including tax reductions, producer subsidies, lower customs duties, and price controls.
According to the report, advanced economies had relied more heavily on reductions in value-added and excise taxes on food and energy.
Emerging markets and low-income countries also more often used measures targeting production costs and supply chains.
Governments also provided income support, with advanced economies using more targeted transfers and poorer countries more often introducing broad-based wage and pension increases.
However, the IMF said these interventions differed in their effectiveness and the financial burden they placed on governments.
It identified targeted, temporary transfers as the preferred approach because they direct assistance to households most in need, preserve limited government resources, and allow market prices to reflect scarcity.
On the other hand, the financial institution said price-suppressing measures can be expensive because much of the support may benefit households that do not need it.
The report cited Europe’s 2022–2023 energy crisis, during which less than 20 cents of every euro spent suppressing electricity, natural gas and gasoline prices reached the poorest fifth of households.
“Subsidising producers can cost 14 to 22 times more than targeted income support,” the IMF said.
It also warned that keeping prices artificially low could weaken incentives to conserve scarce resources.
When several countries adopt such measures at the same time, they can drive up global prices and worsen economic pressures on lower-income countries, the Fund said.
“Producer subsidies are even less efficient. Because they lower production costs rather than directly supporting households, foreign consumers benefit through lower export prices of downstream products.
“As a result, taxpayers pay more to benefit people and businesses in other countries rather than vulnerable families at home,” the lender stated.
Temporary, targeted interventions
The Fund recommended that governments make assistance temporary and deliver it through targeted income-support programmes.
It said the measure could be implemented by expanding existing social protection systems that can be scaled up quickly during crises.
“Assistance, when warranted, should be temporary and delivered through targeted income-support measures, ideally using existing social protection systems that can be scaled up quickly,” it said.
READ ALSO: IMF warns rising stablecoin use could weaken Naira demands
It said broader interventions might be necessary in exceptional circumstances, including acute food insecurity, heightened risks of social unrest or serious difficulties in identifying and reaching eligible beneficiaries.
However, such support should be designed around the temporary component of a price shock rather than permanently higher prices, with clear deadlines for ending the measures.
Where price controls or subsidies are unavoidable, the IMF advised governments to focus narrowly on goods and services consumed disproportionately by vulnerable households while preserving market signals as much as possible.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
-
News4 days agoMirror Particle is building a ‘world model’ of human behavior
-
News3 days ago
FCCPC reviews rules for Nigeria’s online sales promotions, giveaways – Technology Times
-
News2 days ago
Robot data startup Mecka AI nabs $60M from Sequoia
-
Business3 days ago
Nigeria has reduced reliance on oil revenue
