ednut1:
just looks like the black man is bleeped. Can’t dictate or control trade

Is this what happens when you have a baseless entitlement mentality, like the one talent guy in the parable, whose only talent was taken from him and given to those who had more and worked hard to increase their wealth

Afrobeat plant

Gerrard59:


The same could be said of Ghana and Ivory Coast. These chocolate firms generate money because they spend a lot on marketing. It is like Nike or Adidas - make the shoes somewhere in China, and sell them in the West at high prices due to marketing. Two, the major consumers are Westerners, and the companies selling chocolates are theirs. So it won't be easy to disrupt the system. This is unlike electric vehicles, where China is a major consumer, so she can engineer homegrown EV companies.

Since Africans don't consume chocolates like Westerners and the major companies are in the West, the best alternative is to sell to rich Asians - Japanese, Chinese and South Koreans. Also, target Emiratis and Indians. Another alternative is to encourage private investors to establish companies semi-processing cocoa. The final production takes place in the West. Ednut mentioned having constant electricity to preserve it in good condition. That is another issue.

But then, compared to cassava where the West does not participate, Thailand is the major exporter of value-added products, not Nigeria, which is by far the biggest producer globally. That is where successive governments have to support the private sector to add value to it because the Thai folks did the same thing. The major advantage the Thai enjoy is proximity to China - the major consumer of products derived from cassava. Companies are doing the same in Nigeria, but there is so much work to be done. But it is way easier than upsetting the West in chocolate manufacturing. Palm oil is also a case study - we don't have homegrown companies like Wilmar and Sime Darby, which dominate the industry, even though it is said that Malaysia built their industry with oil palm seeds from Nigeria. The major companies behind palm oil production in Nigeria are dominated by foreigners - Europeans, especially Belgians and South East Asians (Malaysians, Thais and Indonesians).

In conclusion, Nigerians are not really as good at long-term entrepreneurship as we claim to be.

I gave your comment a "like" because you touched on some important themes...but not on the major reason for lack of value addition in Nigeria.

The reason why Nigeria and most other Black African countries continue to import finished products made from their own raw exports is this - their governments have STRONG CURRENCY POLICIES that over-value their currencies compared to their fundamentals. That is all, every other issue is minor or even peripheral.

Not only that, STRONG CURRENCY POLICIES which are a subset of generalized socialist policies have ALWAYS been the most important underlying cause of Nigerian economic stagnation. It's not lack of electricity or corruption or anything else. It's SOCIALIST policies, the most important of which is STRONG CURRENCY policies.

A simple hypothetical will suffice. What will happen to say....Innoson Motors if the naira starts trading at ₦‎5,000/1$ tomorrow?

Here's another one everyone needs to think about - WHY are Nigerian interest rates persistently high? The government keeps them high to ensure a higher value for the naira than it deserves. So PRODUCERS are denied cheap capital, which means they don't borrow and invest. Anyone interested should go research the link between interest rates and currency value. I keep coming across people on Nairaland who claim to be forex traders, they surely know this.

https://www.google.com/search?q=relationship+between+currency+and+interest+rates&rlz=1C1CHBF_enUS1037US1037&oq=relationship+between+currency+&aqs=chrome.1.69i57j0i512l7j0i22i30l2.20786j1j9&sourceid=chrome&ie=UTF-8

The high rate of importation into Nigeria has nothing to do with CULTURAL PREFERENCE or lack of patriotism. The cause is a simple thing in plain sight - a strong currency makes imported goods cheaper than they should be!!!

Another thing, weak currency generally boosts productivity, while strong currency suppresses productivity and development. This is why Nigeria has been an underdeveloped, low productivity country for a loooooong time. Even in the times when Nigeria was supposedly doing well in the 1970's, a RATIONAL measure of say HDI will show the country was wallowing in poverty and underdevelopment. During those oil boom years before 2001 what percentage of Nigerians had access to mains electricity and piped water and telephones and university education?

The problem of Nigeria is socialism. Currency control is a socialist policy, it's a SUBSIDY exactly like fuel subsidy. Forex price controls destroy every country that uses it. ALL the prosperous countries in the rich country club called OECD have floating currency.

The ONLY reason Kenya exports more MANUFACTURED goods than Nigeria is that Kenya has a floating currency, Kenya doesn't fix their forex prices. I've seen Kenyan clothing in major retail chains in the USA, Kenya also exports flowers to Europe. I've never seen a single Made-in-Nigeria product in a major retail chain in the USA, not a single thing.

https://www.investopedia.com/terms/forex/k/kes-kenyan-shilling.asp

The Central Bank of Kenya manages the nation’s currency and allows its exchange rate to float freely against others in the global forex market. The central bank operates under a mandate to sustain price stability, maintain liquidity in the country's financial system, and support growth and employment.

And if a country MUST control its currency, it's better to SUPPRESS it instead of boosting it. That's how China became the manufacturing capital of the world.

That's really all there is to the matter. The sad thing is, I'm not sure if Nigeria has TRULY floated its currency, because all sorts of statements coming from the Central Bank indicate otherwise. Forex subsidy in Nigeria is on a par with fuel subsidy as a source of corrupt enrichment.

Have a good night.

IbeOkehie:








So I'd like someone to explain WHY Nigerians prefer imported goods.

Thanks in advance to ANYONE who can tackle these related subjects.

My answer might sound too simplistic but the truth is that most consumer goods that are made in Nigeria do not have that same quality or taste like the imported ones, and I will give a few examples
Nasco cornflakes/ Kellogg
Gold custard vs Birds
Oat meal vs Quaker oat
Milo vs Ovaltine
Lux vs Dove soap
Seaman snapp vs Bertola snaps
Uncle Benz vs ofada
Nigeria shortbread vs imported mcvites
Holland peak vs Nigeria peak

There are so many of them. In all of these, the difference in quality is very clear. I have tried all of them.

Nolevel666:


Must you always choose mediocrity?

Mumu

Your mother no raise you to respect your elders?

Exmilitant:
Your mother no raise you to respect your elders?

I am the universe

No one can possibly be older than the universe itself

Unless you’re speaking on an anthropological context of which we know, the so called elders have proven themselves to be clueless and selfish bufons.

Look where the “wisdom of elders” have gotten us to.

Spits

ednut1:
then the buyers abroad will go elsewhere. Their gain is in the value chain. Ask Ghana how far

Maybe we need to ignore them, and focus on the end users.

For instance, why export cocoa and import chocolate at a much higher cost?
If we insist that the cocoa be processed, we can focus then on exporting to buyers of chocolate. We could at least save up on the forex used in importing chocolate and in addition to the farmers create additional employment. These "buyers" have always exploited us anyway with unfair trade agreements anyway.

mariahAngel:


Outright banning has never helped Nigeria.

Sure, but then the present situation isn't helping too.

FreeStuffsNG:
Because you have not done your own research, you have been misinformed by those blinded by hate. If our agriculture sector had not been revived, how would we have coped during and after Corona? The largest rice mill in west Africa is a partnership between Lagos and Kebbi state, is it that you have not heard of lake rice? The sesame that is now a gold mine happened during his tenure and local rice production today became a reality due to the hardwork of PMB , his agric minister and Emefiele. As bad as the naira redesign messed up the legacy of Emefiele, he helped the farmers Where people do fine, give them the credit. FTN cocoa just landed an fdi of $12m over the weekend. Please always go beyond the social media mostly full of negative and unpatriotic lazy folks

Please do your own research and not parrot propaganda also. Sesame seed export has always been viable, even more, before PMB came on board. It was just unreported. Unless you believe that Mungo Park "discovered" the Niger.

Secondly, look around you and tell me how many shops you have ever seen the Lake rice. Rice production grew because of the border closure (thanks to PMB) and the enterprising spirit of Nigerians, despite the terrible insecurity (knocks to PMB too). Individual little efforts aggregated to give us food, not the billions given to a few Nigerians by CBN.
When you talk about coping during Corona, it is clear you do not see that Nigerians really suffered during the lockdown. Stop reopening those wounds, please.

Mordecai:



Maybe we need to ignore them, and focus on the end users.

For instance, why export cocoa and import chocolate at a much higher cost?
If we insist that the cocoa be processed, we can focus then on exporting to buyers of chocolate. We could at least save up on the forex used in importing chocolate and in addition to the farmers create additional employment. These "buyers" have always exploited us anyway with unfair trade agreements anyway.



Sure, but then the present situation isn't helping too.

how many chocolate do we consume The product is called a cashcrop for a reason

ednut1:
how many chocolate do we consume The product is called a cashcrop for a reason

When we say chocolate, we do not refer only to chocolate bars. What is generally referred to as tea in Nigeria is actually chocolate drinks.
Recount the chocolate bars, the chocolate spread jars as well as the ones used in biscuits, then add it to the tea, and you'll be shocked how much chocolate we import.

Mordecai:



Maybe we need to ignore them, and focus on the end users.

For instance, why export cocoa and import chocolate at a much higher cost?
If we insist that the cocoa be processed, we can focus then on exporting to buyers of chocolate. We could at least save up on the forex used in importing chocolate and in addition to the farmers create additional employment. These "buyers" have always exploited us anyway with unfair trade agreements anyway.



Sure, but then the present situation isn't helping too.

Cadbury processes cocoa into chocolate in Nigeria.

Nestle also processes cocoa into chocolate in Nigeria.

There are other companies too that process cocoa into chocolate in Nigeria.

codemaniacs:


Cadbury processes cocoa into chocolate in Nigeria.

Nestle also processes cocoa into chocolate in Nigeria.

There are other companies too that process cocoa into chocolate in Nigeria.

I wouldn't be surprised if Cadbury and Nestlé use some sort of intermediate cocoa product input processed abroad. In fact I strongly suspect that is the case.

Adding value in Nigeria is generally uneconomic. The resulting product is not price competitive.

Thanks.

IbeOkehie:


I wouldn't be surprised if Cadbury and Nestlé use some sort of intermediate cocoa product input processed abroad. In fact I strongly suspect that is the case.

Adding value in Nigeria is generally uneconomic. The resulting product is not price competitive.

Thanks.

Cocoa is cheap, there's no need to add anything, the exported cocoa seeds already have too much value despite how cheap they are.

It's Nigerians that don't want to go into processing cocoa and saturate the market, its the same issues with processing Palm kernel seeds and getting Palm products gotten from it.

Only thing they add is too much sugar. And that can be controlled by regulatory authorities in Nigeria.

codemaniacs:


Cadbury processes cocoa into chocolate in Nigeria.

Nestle also processes cocoa into chocolate in Nigeria.

There are other companies too that process cocoa into chocolate in Nigeria.

That's the way for us to go then.

In addition, rather than encourage a few billion naira companies, we need to have plenty cottage facilities processing the product. Competition will thus lead to quality improvements and better pricing.
In that case, when the Governor of Osun State for instance, is negotiating trade deals, he can be talking about biscuit makers in UK buying their chocolate powder from Osun traders. I believe such a deliberate policy will have more impact on their middle class.

codemaniacs:


Cocoa is cheap, there's no need to add anything, the exported cocoa seeds already have too much value despite how cheap they are.

It's Nigerians that don't want to go into processing cocoa and saturate the market, its the same issues with processing Palm kernel seeds and getting Palm products gotten from it.

Only thing they add is too much sugar. And that can be controlled by regulatory authorities in Nigeria.

You have a good point here.

sonnie10:


My answer might sound too simplistic but the truth is that most consumer goods that are made in Nigeria do not have that same quality or taste like the imported ones, and I will give a few examples
Nasco cornflakes/ Kellogg
Gold custard vs Birds
Oat meal vs Quaker oat
Milo vs Ovaltine
Lux vs Dove soap
Seaman snapp vs Bertola snaps
Uncle Benz vs ofada
Nigeria shortbread vs imported mcvites
Holland peak vs Nigeria peak

There are so many of them. In all of these, the difference in quality is very clear. I have tried all of them.

Omo, give me Milo and Nasco anytime o. But I agree with the rest.

IbeOkehie:


I gave your comment a "like" because you touched on some important themes...but not on the major reason for lack of value addition in Nigeria.

The reason why Nigeria and most other Black African countries continue to import finished products made from their own raw exports is this - their governments have STRONG CURRENCY POLICIES that over-value their currencies compared to their fundamentals. That is all, every other issue is minor or even peripheral.

Not only that, STRONG CURRENCY POLICIES which are a subset of generalized socialist policies have ALWAYS been the most important underlying cause of Nigerian economic stagnation. It's not lack of electricity or corruption or anything else. It's SOCIALIST policies, the most important of which is STRONG CURRENCY policies.

Thanks for your reply.

I have always advocated for a weak currency, however, it should be floated not controlled. My argument has been consistent: Nigeria is not Switzerland or Singapore to warrant having a strong currency. However, successive governments have not done their part by ensuring there is an adequate supply of electricity, liberalising the exports of certain goods (yam is restricted from being exported) and providing security. Those are where the problem lies.

As for interest rates, my belief about it has to do with the lack of trust in the Nigerian society. So banks need to ensure the rates are so high to prevent any Tom, Dick and Harry from borrowing anyhow and refusing to pay. Ordinary PalmPay, Nigerians are complaining. To be honest, most Nigerians are terrible debtors. Lending a Nigerian money can be worrisome because paying back becomes a problem.

Regarding countries controlling their currency, Japan controls the Yen and had to do so last year by spending $9BN when interest rates in the US shot up and the Yen devalued to ¥150/170 to $1. Nevertheless, I agree with you, the naira, cedis and the rest of the currencies should float freely. No need to have a strong currency especially if it is a fairly to highly populated country. Allow the naira to float and invest returns from exports (hopefully from the non-oil sectors) into infrastructure and primary-secondary school education. Nigeria is too populated to afford a feeding bottle government.

Mordecai:



Maybe we need to ignore them, and focus on the end users.

For instance, why export cocoa and import chocolate at a much higher cost?
If we insist that the cocoa be processed, we can focus then on exporting to buyers of chocolate. We could at least save up on the forex used in importing chocolate and in addition to the farmers create additional employment. These "buyers" have always exploited us anyway with unfair trade agreements anyway.
Sure, but then the present situation isn't helping too.

The major consumers of chocolate are oyibo countries. They determine the demand and the companies behind the industry are theirs. If you restrict export of cocoa, they move to Indonesia and Ghana. Also Brazil. You don't dictate the price of a commodity as the seller when there are other sellers. Your buyers determine the price. OPEC is an exception not the norm. Also, crude oil has more uses, buyers and deriatives than cocoa.

Regarding trade agreements, Nigeria has not signed any trade agreement as an individual country with any rich country. In fact, the lack of any signed agreement do us more harm than good.

Bioboy1213:
I will advice you deal with reputable companies if that's the case, e g Valency international Ltd and many more, can put you through anytime you ready.

Thank you so much.
I will research about them

codemaniacs:


Cocoa is cheap, there's no need to add anything, the exported cocoa seeds already have too much value despite how cheap they are.

It's Nigerians that don't want to go into processing cocoa and saturate the market, its the same issues with processing Palm kernel seeds and getting Palm products gotten from it.

Only thing they add is too much sugar. And that can be controlled by regulatory authorities in Nigeria.

I think the major reason Nigeria doesn't process raw materials is the overvalued naira.

I was shocked to learn some years ago that Nigerian cashew nuts are shipped to Vietnam and some other Asian countries for processing BEFORE being exported to Europe.

I was shocked. Currency control is destructive.

Have a good day.

IbeOkehie:


I think the major reason Nigeria doesn't process raw materials is the overvalued naira.

I was shocked to learn some years ago that Nigerian cashew nuts are shipped to Vietnam and some other Asian countries for processing BEFORE being exported to Europe.

I was shocked. Currency control is destructive.

Have a good day.

It has nothing to do with naira.

It has to do with lack of funds and lack of motivation by the federal and state government to fund the construction and building of processing facilities whether small or big...

Dangote was and is giving funds by the government to invest in sugar, oil, cement e.t.c

That means the government can also give other people interested the funds to invest in processing cocoa, Palm kernel, cashew nuts e.t.c..

The major reason is the Nigerian government would only provide funds to a northerner to make it seem as if northern Nigeria is contributing to Nigeria through agriculture and hiding the fact that the raw materials are from southern Nigeria and at worst north Central states which in reality is still southern Nigeria.

The other problem is state governments don't make funds available from their state budgets or from loans to invest in such businesses.

Why doesn't Kogi have a Kogi cement company or Ogun also have Ogun Cement company. Bayelsa does not have Bayelsa Petroleum company, Delta, Akwa Ibom, Rivers don't have their own state owned oil companies and no one is preventing them from establishing such.

The only thing preventing them is lack of political will and lack of intelligence in establishing businesses.

Na corruption

Gerrard59:


Thanks for your reply.

I have always advocated for a weak currency, however, it should be floated not controlled. My argument has been consistent: Nigeria is not Switzerland or Singapore to warrant having a strong currency. However, successive governments have not done their part by ensuring there is an adequate supply of electricity, liberalising the exports of certain goods (yam is restricted from being exported) and providing security. Those are where the problem lies.

As for interest rates, my belief about it has to do with the lack of trust in the Nigerian society. So banks need to ensure the rates are so high to prevent any Tom, Dick and Harry from borrowing anyhow and refusing to pay. Ordinary PalmPay, Nigerians are complaining. To be honest, most Nigerians are terrible debtors. Lending a Nigerian money can be worrisome because paying back becomes a problem.

Regarding countries controlling their currency, Japan controls the Yen and had to do so last year by spending $9BN when interest rates in the US shot up and the Yen devalued to ¥150/170 to $1. Nevertheless, I agree with you, the naira, cedis and the rest of the currencies should float freely. No need to have a strong currency especially if it is a fairly to highly populated country. Allow the naira to float and invest returns from exports (hopefully from the non-oil sectors) into infrastructure and primary-secondary school education. Nigeria is too populated to afford a feeding bottle government.

Thanks for the reply. I fully agree with you that floating currency is the best policy. Some of the details you've pointed at give a wrong impression of certain situations.

As for interest rates, my belief about it has to do with the lack of trust in the Nigerian society. So banks need to ensure the rates are so high to prevent any Tom, Dick and Harry from borrowing anyhow and refusing to pay. Ordinary PalmPay, Nigerians are complaining. To be honest, most Nigerians are terrible debtors. Lending a Nigerian money can be worrisome because paying back becomes a problem.

The Central Bank sets interest rates and banks follow that because they have no choice, because the government is the sole supplier of currency. Lack of trust is a small contributor to high interest rates. Another contributor is lack of collateral. Whatever the case, no bank or lender can AFFORD to set an interest rate less than the Central Bank rate in any country.

Regarding countries controlling their currency, Japan controls the Yen and had to do so last year by spending $9BN when interest rates in the US shot up and the Yen devalued to ¥150/170 to $1.

Japan has a free floating currency. When a Central Bank trades currency or sets interest rates to influence the value of its own currency, that is still a full float because the marketplace can still legally RESPOND via price. The currency control I'm referring to is when a currency is PEGGED at a fixed price, such as has been the case in Nigeria for so long. The only way to respond to the currency fix is to enter the ILLEGAL BLACK MARKET or parallel market. Such a fix incompatible with a free float and is unsustainable in the long run as the UK found out in 1992 and Switzerland in 2005. Nigeria is the latest example of that futility.

Thanks.

codemaniacs:


It has nothing to do with naira.

It has to do with lack of funds and lack of motivation by the federal and state government to fund the construction and building of processing facilities whether small or big...

Dangote was and is giving funds by the government to invest in sugar, oil, cement e.t.c

That means the government can also give other people interested the funds to invest in processing cocoa, Palm kernel, cashew nuts e.t.c..

The major reason is the Nigerian government would only provide funds to a northerner to make it seem as if northern Nigeria is contributing to Nigeria through agriculture and hiding the fact that the raw materials are from southern Nigeria and at worst north Central states which in reality is still southern Nigeria.

The other problem is state governments don't make funds available from their state budgets or from loans to invest in such businesses.

Why doesn't Kogi have a Kogi cement company or Ogun also have Ogun Cement company. Bayelsa does not have Bayelsa Petroleum company, Delta, Akwa Ibom, Rivers don't have their own state owned oil companies and no one is preventing them from establishing such.

The only thing preventing them is lack of political will and lack of intelligence in establishing businesses.

NNPC is funded by government and the three refineries it owns are moribund. Ajaokuta Steel is government owned, it produces nothing. The 36 state governments and FCT each have Water Boards, yet piped water is nowhere to be seen. When is the last time you got mail delivery by NIPOST?

Asking government to build cashew or cocoa processing factories is asking for disaster, waste and corruption. In fact government interest is exactly why Dangote is taking this long to complete his refinery.

Thanks and have a good day.

Gerrard59:


The major consumers of chocolate are oyibo countries. They determine the demand and the companies behind the industry are theirs. If you restrict export of cocoa, they move to Indonesia and Ghana. Also Brazil. You don't dictate the price of a commodity as the seller when there are other sellers. Your buyers determine the price. OPEC is an exception not the norm. Also, crude oil has more uses, buyers and deriatives than cocoa.

Regarding trade agreements, Nigeria has not signed any trade agreement as an individual country with any rich country. In fact, the lack of any signed agreement do us more harm than good.

Very soon tomato farmers will say Restaurants are exploiting them. A lot of money goes into cocoa development into chocolate and the only thing you can do is have your own chocolate industry for your local market but to starve foreign companies of cocoa seeds is not fair trade as they have their own chocolate market and their companies have workers and CEOs but if cost of living lowers in the west, farmers across the world will have a much better deal and that is what everybody should be praying for.

Nolevel666:


I am the universe

No one can possibly be older than the universe itself

Unless you’re speaking on an anthropological context of which we know, the so called elders have proven themselves to be clueless and selfish bufons.

Look where the “wisdom of elders” have gotten us to.

Spits

Look who is talking.
The universe is interconnected.
Disrespecting one is disrespecting all even your self.
The phenomenon is the noumenon.

Hail Satan!!

Exmilitant:
Look who is talking.
The universe is interconnected.
Disrespecting one is disrespecting all even your self.
The phenomenon is the noumenon.

Hail Satan!!

Well, sorry for taking it too personal.

As an individual, i prefer meritocracy to favouritism.

Hail satan!

Nolevel666:


Well, sorry for taking it too personal.

As an individual, i prefer meritocracy to favouritism.

Hail satan!

You need not stretch semantics too far. The topic in dispute doesn't call for it.

Hail Lilith, hail Satan.

mariahAngel:
I read that back in the day, Nigeria was one of the world's biggest exporter of Cocoa, groundnuts, kolanut, bitter kola, etc.
Those were what made the Nigerian economy a very stable one, according to history.

So, what happened?
At what point did we get it wrong?
What can we do to make things right?

I believe if Nigeria will be better again, it will be majorly through agricultural exports.

Picture credit: Google

No value addition.
A nation cant proper just by selling commodities.

hopexter:


Recently it been the cocoa leaves business that’s is trending. I know a guy who exported 30kg of dried cocoa leaves to UK for 68k Naira and he sold them for 3k pounds. 1k pounds each per 10kg bag.

wetin them dey use am do?

Igbo....osogbo variant

IbeOkehie:


Thanks for the reply. I fully agree with you that floating currency is the best policy. Some of the details you've pointed at give a wrong impression of certain situations.



The Central Bank sets interest rates and banks follow that because they have no choice, because the government is the sole supplier of currency. Lack of trust is a small contributor to high interest rates. Another contributor is lack of collateral. Whatever the case, no bank or lender can AFFORD to set an interest rate less than the Central Bank rate in any country.



Japan has a free floating currency. When a Central Bank trades currency or sets interest rates to influence the value of its own currency, that is still a full float because the marketplace can still legally RESPOND via price. The currency control I'm referring to is when a currency is PEGGED at a fixed price, such as has been the case in Nigeria for so long. The only way to respond to the currency fix is to enter the ILLEGAL BLACK MARKET or parallel market. Such a fix incompatible with a free float and is unsustainable in the long run as the UK found out in 1992 and Switzerland in 2005. Nigeria is the latest example of that futility.

Thanks.

In normal countries, government have no forex income so the notion of floating or not floating does not even arise. The Japanese government have power only over the yen and it is only importers and exporters that have and use forex. In Nigeria like in all nations where government sells oil, the government has forex income that is sizeable but it can not be more than thirty percent of total inflow if up to that. The problem in Nigeria includes the government wanting to control all forex inflow from exports, remittances, online fraud, gifts and etc and that is totally unfair because those dollars do not belong to them. Even the oil forex ought to be shared in dollars to the states.