Cocoa farmers demand release of export grant
“We do not want the Nigeria Cocoa Processing Sector to close down completely, as is being seen in other parts of the world,” it added.
Olusuyi said that the export grants in question were those genuine applications submitted since 2007 and processed by the Nigerian Export Promotion Council in collaboration with the lead consultants to the scheme Messrs. PriceWaterhouseCoopers and are ready for disbursement.
According to him, members factories had been forced to borrow funds from banks, which were themselves ailing to cover the shortfall created by the non payment of the export grants, which in itself created a further problem to their members of very high finance costs and interest charges which massively devalue the real value of the grants as and when received and threatened to remove the whole value should they delayed.
“The delay in releasing the outstanding export grant also poses liquidity problems to the banks as well as the Cocoa Processing Factories,” he added.
He disclosed: “The report of the inter-ministerial committee for the review of the report issued by PriceWaterhouseCoopers has been concluded and submitted to the Minister of State for Finance since November 26th 2009.
“The Minister of State for Finance, Mr. Remi Babalola promised in October 2009 to release the 2007 Export Expansion Grants which had been withheld by the Federal of Finance since September 2009 after the completion of the review of the PriceWaterhouseCoopers Audit report by the Export Expansion Committee, who completed their review in Jos recently.”
He also lamented that the international cocoa buyers have pushed the price of cocoa beans to 26 year high levels to avoid losing out on cocoa beans to be exported to Europe for processing in European factories.
This, he said, made it almost impossible for Nigerian factories to source cocoa beans to process at economic prices.
“Prices for Nigerian Cocoa Butter, Cocoa Cake and Cocoa Liquor are low due to the impact of Nigerian’s non agreement to the proposed EPA (European Partnership Agreement) causing import duties of between 4.2 per cent to 7.1 per cent on our products on their arrival in the European market. The same does not apply to our competitors in Cote D’ Ivoire or Ghana. Whilst we understand and accept the Federal Government has to consider the interests of the whole Nigerian economy when considering such agreements, it is not fair to allow one manufacturing sector to suffer excessively as a result.
“European import duties do not apply to raw Nigerian cocoa beans giving raw bean exporters further price advantages over Nigerian cocoa processors, however we are adding value, stimulating local economics for the long term and creating long term employment, whereas bean exporters are not.”
He hinted that international cocoa bean traders are now operating in the Nigerian hinterland pushing prices up further, these areas being the traditional trading grounds for indigenous companies and processing factories.
He listed other challenges to include unstable power supplies and high bank interest rates.
The Global Financial credit crisis in world banking, he added had worsened further the bad demand for our products by our overseas buyers, and most factories had had to either slow down or suspend production because of high unsold stocks which also could not be financed.