en Inter-réseaux Développement rural en Inter-réseaux Développement rural


The Nigerian Giant Hungers for its Neighbours' Coconuts

Nigeria is generally seen as a regional giant capable of
stimulating the agricultural economies of neighbouring
countries. Without appropriate public policies, however, regional
integration has its limits. Here, we illustrate this with a
case study of a little-known activity, the coconut value chain
in Ghana.

At scientific meeting in 1990, a researcher
displayed a map of agricultural production
in West Africa with a large blank space for
Nigeria, indicating the absence of reliable data on
this regional giant. Since then, although research on
this country has improved somewhat, there are still
areas in which one can learn more about Nigeria via
its neighbours. This is the case of the coconut value
chain. Without much fanfare, Nigeria imports coconuts
from neighbouring countries in West Africa.
Is this an example of regional integration, driven by
demand from Nigeria?

Growing Demand in Nigeria. The demand for coconut
in Nigeria has outstripped the country’s production
capacity for several decades. Coconut production
is limited to the south-western part of the country,
while national consumption is rising. Coconut oil
has been imported from Benin and Togo since the
1980s. In the 1990s, demand shifted from oil to the
nuts themselves. Coconut oil has gradually been replaced
by less expensive palm oil. Coconut consumption,
however, has continued to rise with the growing
population, especially dry coconuts consumed in
northern Nigeria. Import channels for dehusked dry
coconuts are being put into place: young Nigerians go
to plantations in Benin and Togo where they pay for
coconuts to be gathered, dehusked and then hauled
to Nigeria. In the late 1990s, traders went as far as
Côte d’Ivoire which had a coconut surplus, thanks
to a hybrid coconut R&D programme. But the hybrid
varieties keep less well than the traditional coconut [1],
called “Grand-ouest africain” (GOA), and from 2002
onwards Nigerian buyers turned massively to GOA
coconuts grown in western Ghana.

The Situation in Ghana Before the Arrival of Nigerian
The development of a coconut
value chain in south-west Ghana is a textbook case.
Introduced in the 1920s by a British forestry operator,
coconut growing expanded in the 1950s when a
copra [2] processing plant was created, as a result of
public policy. Under the socialist regime, this plant
was managed by civil servants. Planters became dissatisfied
with the deteriorating terms offered by the
plant for their coconuts and, over the course of the
1960s and 1970s, villages along the south-western
coast of Ghana established their own small-scale processing units. At the same time, there was not
enough land available for young planters coming of
age, and they turned to post-harvest activities and
transport of coconuts and oil. Some traded as far
away as Accra, and began to make loans to planters,
gradually coming to control the whole value chain.
Coconut became nearly the only income-generating
activity along the south-west coast of Ghana, and a
major source of employment. Over the years, a few
big oil processors came to dominate the chain, via
loans and the chronic indebtedness of planters. This
economy based almost entirely on a single crop was
fragile. The region was increasingly threatened by
the lethal yellowing disease that afflicted coconut
trees and spread in the 1990s. A hybrid coconut development
programme was set up with help from
French cooperation authorities, crossing GOA and
more productive varieties, but its results were not
conclusive and prices remained very low. In this
seemingly dismal context for the future of the value
chain, demand from Nigeria initially seemed to be
a positive thing for the region and its planters. An
example of successful regional integration? A closer
look leads to a more nuanced view.

Creation of a Nigerian Purchasing Channel in
South-Western Ghana.
Nigerians buyers came to
Ghana scouting for opportunities, and set up business
where they were sure to be able to procure coconut.
They first set up in about 2002, in Jomoro, the prime
coconut-producing district, still untouched by lethal
yellowing disease. Their presence became more visible
in 2005 as other Nigerian buyers set up in neighbouring
districts. These buyers are between twenty and
forty years old, and some of them have university
degrees in marketing. They work for merchants and
trading companies based in Lagos that finance them
via a commercial bank located in Half-Assinia, the
district capital. The young Nigerians redistribute this
money to Ghanaian intermediaries who purchase
and collect coconut for the buyers. The coconuts are
shipped in trucks registered in Ghana to the Nigerian
border, where they are transferred to lightweight
vehicles that take the shipments to Lagos. Most of
the coconuts are sent to Kano, where they are sold
for consumption throughout northern Nigeria and
in neighbouring Sahel countries.
The Nigerian buyers, with capital and the Nigerian
currency, the naira (that appreciated by 40%against
the Ghanaian cedi between 2005 and 2009), found it
easy to compete with local processors. To compensate
for the fact that they did not provide the same services as the processors [3], the buyers offered a higher price
than the local price, and covered the cost of peeling
and transport to their warehouses. In this way, they
could load trucks quickly and ensure rapid rotation
of their capital. The Nigerian market now absorbs
over 50% of coconut sold in Ghana.

The Impact of Nigerian Pressure on the Local
Value Chain

Positive Impacts: Higher Prices, Greater Added Value.
The first effect of strong demand from Nigeria was a
rapid rise in prices in south-western Ghana. Nigerian
buyers, taking advantage of the economic rent generated
by higher prices for coconut in Nigeria and the
naira/cedi exchange rate, were able to raise the purchase
price offered year after year. This upward pressure
can also be attributed to competition between
buyers. Between 2005 and 2008, the price of 100 coconuts
delivered to the warehouse went from three
to nine cedis, or from two to four cedis in constant
currency (2001 value). This doubling of the constant
price was indeed due to Nigerian purchases. The intervention
of Nigerian buyers generally increased the
added value created in the coconut value chain in the
coconut districts of south-west Ghana.

© .K. Dziwormu

Less Positive Impacts: Added Value Accruing to Intermediaries.
The only planters who benefited fully
from the higher prices were those who could make
their own deliveries to the Nigerian collection points.
For the others, the added value was captured by the
intermediaries operating between the Nigerian buyers
and the Ghanaian planters, locked into debtorcreditor
relationships. In the end, only one-third of
planters have reaped the benefits, while two-thirds
have gained little from the Nigerian market. Moreover,
this limitation on the price effect, along with
the advancing age of most planters, has considerably
constrained investment capacity and renewal
of plantations. Here, we encounter the paradigm so
often seen in family plantations: planters who own
old trees are themselves too old to invest in replanting,
and the young people that would have the energy
for this work have little or no access to land.
In addition, the demand from Nigeria has sparked
theft of coconuts and generational conflicts. In the
absence of land or alternative employment, young
people are tempted to steal coconuts from their fathers’
plantations and sell them to the Nigerians.
This could be considered to be a “redistribution of
income” between age groups, but this income is
rarely reinvested.
Finally, as the Nigerian export/import channel prospers
and supply dwindles, local coconut oil processors
are collapsing. This has resulted in the loss of about
two-thirds of oil processing and sales jobs.

Regional Integration and its Unwanted Side-Effects.
In this example, we can see that Nigeria plays its role
as the regional giant, hungry for staple foodstuffs and,
at least at first glance, able to support agriculture in
neighbouring countries. It is quite likely that the effects
of this coconut chain have been underestimated
in national statistics, for Ghana and Côte d’Ivoire in
particular. This value chain, that stretches across the
forest regions to the savannah and the Sahel, illustrates
the extent to which the “absence of regional
integration” denounced by some experts is in part
due to ignorance of the informal economy on the
At the same time, this demand from the Nigerian
giant also has unwanted effects on Ghana. It remains
to be seen whether this form of regional integration
can save and renew coconut growing in neighbouring
countries. These aspects must be taken into account
in public policy and in talks between the States of
West Africa.

François Ruf is a
researcher in the
Innovation et
Développement dans
l’Agriculture et
l’Agroalimentaire research
unit at CIRAD, based in

Ambrose Kwaku
Dziwornu is a student at
the University of Ghana.

Jérémy Salinier is a
student at Supagro Institut
des Régions Chaudes
(IRC), Montpellier.

Philippe Courbet works
as an adviser at the French
Embassy in Ghana.

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