Cocoa farmers, exporters bemoan NAFDAC’s ‘anti-business’ regulations

The Cocoa Processors Association of Nigeria (COPAN) has raised the alarm about the Export Regulations 2024 proposed by the National Agency for Food and Drug Administration and Control (NAFDAC). The association said it is capable of killing their business with multiple taxes, as the agency lacks both the infrastructure and human capabilities to regulate numerous export transactions in the Nigerian sea and airports.

In a press conference held in Lagos, COPAN, the umbrella body of manufacturers engaged in processing raw cocoa beans into cocoa cake, cocoa powder, cocoa liquor, and cocoa butter for both local and international markets, noting that the country’s current foreign exchange inadequacy will suffer more under the new NAFDAC export regulations.

During the media briefing, the association’s chairman, Otunba Felix Oladunjoye, said the regulations are a sheer duplication of efforts and functions of other government agencies. “If the National Assembly passes the proposed export regulations 2024, the resultant effects would be multiple taxation, delayed shipments resulting in international contract default, heavy penalties on Nigerian exporters, loss of employment and worsening company profitability.

“It may be of interest to you to know that out of the 15 established functional cocoa processing factories; only four are operating with less than 30 per cent capacity. For the avoidance of doubts, we have reproduced some sections of the proposed new regulations which are not business-friendly regulations:

“Sections 3, 4, and 17 of the proposed bill provide – Section 3 Application for export (1) Application for export of regulated product shall be made by submitting a complete application form, accompanied by relevant documents as the agency may, from time to time, prescribe and shall – (a) contain the particulars and description of the relevant product, in respect of which the application is made; and (b) be accompanied by such fee as the agency may, from time to time, prescribe…

“Aside from NEPC, other agencies such as the following are involved in the regulation of Cocoa products for export – Federal Ministry of Health (Nigeria Agricultural Quarantine Service Plant Health). The ministry is responsible for the issuance of export certificates, which are known as Phytosanitary certificates. Phytosanitary certificates are issued only to indicate that consignments of plants, plant products, or other regulated articles meet specified phytosanitary import requirements. The certificates come at a cost. For instance, the issuance of a phytosanitary certificate costs N3, 000 for a 20-feet container and N6, 000 for a 40-feet container.

“Nigerian Customs Services also issues export clearance certificates at a cost of N15, 000 per container of 20 feet and N25, 000 per container of 40 feet after goods are inspected at sea or airports. NACCIMA issues the certificate of origin at a cost of N5, 000 per container.

“The Federal Produce Inspection Service under the Federal Ministry of Trade and Investment is responsible for fumigating all the produce presented for export to kill and destroy all pest infestations prior to export and issuing certificates of quality fumigation, good packaging material and weight to all agricultural produce that passes quality tests and is exported out of Nigeria. These certificates are issued at a cost of N5, 000 per bill of lading.”

Oladunjoye said only four out of the cocoa processing factories are in operation, which owes to their businesses experiencing a downturn as a result of the country’s economic situation, warning that passing the proposed draft bill sponsored by NAFDAC will worsen the economic situation.

“As can be gleaned from the above analysis of various governmental agencies regulating the export of processed cocoa, it would be seen that there is nothing new that NAFDAC wanted to regulate by its Export Regulations 2024 than a duplication of functions being carried out by the above-mentioned agencies and revenue generation and this would lead to delays in shipments, loss of foreign exchange earnings and lay off of workers.

“Our sector, the non-oil sector, had already been hard hit by a combination of factors, chief among which are poor infrastructure, rising produce costs, the continued fall in the value of the naira, and the Central Bank of Nigeria’s policy on the utilisation of foreign exchange and by adding the proposed export regulations 2024 by NAFDAC into the overburdened non-oil sector would not be in the interest of the exporters and the country in general.

“Many of our members are battling huge debts from bank loans, which is forcing them to either substantially reduce staff strength or shutdown operations, the effect of which is the reduction in the foreign currency being generated through semi-processed export commodities,” he said.