British International Investment (BII), the United Kingdom’s development finance institution (DFI) and impact investor, has signed a $40.5 million loan facility aimed at boosting cocoa production in Nigeria.
The signing ceremony was held on Tuesday at Transcorp Hilton, Abuja, and attended by Nairametrics.
The loan investment from BII aims to support the rehabilitation and refurbishment of Johnvents’ Group’s second cocoa processing facility in Ile-Oluji, Ondo State.
Creating Economic Opportunities for Nigerian Farmers
- Speaking at the ceremony, Benson Adenuga, Head of Office and Coverage Director, BII Nigeria, said the partnership with Johnvents aligns with BII’s strategy of backing Nigerian businesses.
“Today, I am delighted to announce that we are signing a $40.5 million loan facility with Johnvents Group.
“We are delighted to partner with Johnvents Group to address critical barriers to the growth of Nigeria’s cocoa industry,” he said.
According to Adenuga, the loan will enable the cocoa processing facility’s annual capacity to increase from 13,000 to 30,000 metric tonnes.
- Adenuga disclosed that BII is already in partnership with a range of Nigerian businesses in the food and agricultural value chain to help Nigeria produce high-value crops and improve agricultural infrastructure, including processing facilities, warehousing, and export logistics.
- He expects the latest investment to not only boost cocoa production and processing while enhancing global profitability but also create economic opportunities for Nigerian farmers.
“BII has a rich history in Nigeria dating back to 1948.
“We have been investing in Nigeria for over 75 years. We are committed to long-term investment in the country, tailoring our products to overcome market challenges,” he explained.
UK-Nigeria Trade Partnership
- Speaking at the event, Jonny Baxter, British Deputy High Commissioner in Lagos, highlighted the UK’s flagship trade initiative, the Developing Countries Trading Scheme, which was previously launched.
- He stressed that the scheme offers tariff reductions on over 3,000 products.
- He explained that under this scheme, 99% of Nigerian agricultural exports to the UK, such as cocoa butter and cocoa paste, are now duty-free, making it easier for Nigerian businesses to enter and expand within the UK market.
“By working in partnership, we can strengthen the supply chains between the UK and Nigeria, transform economic potential in both countries and further increase the £7.5 billion trade volume between the UK and Nigeria,” he said.
- On his part, John Alamu, Group Managing Director of Johnvents Group, appreciated BII for the partnership, describing it as a step forward in the company’s goal and “a vote of confidence.
- Responding to questions regarding the $40.5 million loan and its tenure, Adenuga stated that the facility is “a long-term loan,” as it involves refurbishing a factory.
- He said the facility is flexible but did not disclose further details on the loan.
What You Should Know
Nigeria’s cocoa earnings surged by 279% in the first quarter of 2024, driven by elevated cocoa prices.
Data from the National Bureau of Statistics (NBS) showed that cocoa exports reached a value of N408.66 billion in the first three months of 2024, up from N107.59 billion during the same period in 2023.
- Since then, the market has faced ongoing instability, with supply fears fueling continued volatility.
- According to the AFEX 2024 wet season in November, Cocoa production in Nigeria was projected to increase by as much as 10% on the back of elevated cocoa prices in the international market in the last one year.
- The report noted that cocoa production in Nigeria in 2023 further worsened the global supply deficits from major producers like Ghana and Cote d’Ivoire.
The report reveals that around 76% of the cocoa farmers interviewed were smallholders with less than 2 hectares under cultivation, while only about 3% managed more than 5 hectares. The majority of these farmers were aged between 36 and 45.
