Nigeria’s historic $6.1 billion non-oil export performance in 2025 is under pressure as the sharp correction in global cocoa prices in 2026 exposes the risks of relying heavily on raw commodity exports, according to Dele Oye.
Oye, Chairman of the Alliance for Economic Research and Ethics, said while the 2025 milestone marked a significant achievement, the current cocoa market downturn highlights the structural weakness of a price-driven export model.
“Nigeria’s $6.1 billion non-oil export achievement in 2025 was historic, but the 2026 cocoa price correction exposes the fragility of a raw-material-dependent strategy,” he said in a policy brief titled ‘Navigating the 2026 Commodity Price Correction’.
Pinnacle Daily reported that Nigeria recorded $6.1 billion in non-oil exports in 2025, representing an 11.5 per cent year-on-year growth, with export volumes hitting 8.02 million metric tonnes across 281 products shipped to 120 countries.
Cocoa alone accounted for $1.99 billion, or 32.7 per cent of total non-oil exports, making it the single largest contributor.
Oye, however, noted that much of the growth was driven by record-high commodity prices rather than structural gains in processing or volume expansion.
“This was largely ‘price-push’ growth driven by record commodity prices rather than volume expansion or value-added processing,” he said.
Global cocoa prices, which peaked above $10 per kilogram in 2024, have since dropped to about $5 per kilogram in early 2026 — a decline of roughly 50 per cent.
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Oye described the situation as a “double squeeze”, worsened by the appreciation of the naira, which reduces export competitiveness and compresses margins.
“To sustain 2025 revenue levels at $5/kg, Nigeria needs a 60% volume increase—an unrealistic short-term target,” he warned.
He lamented that the correction has exposed the country’s vulnerability as a raw bean exporter without sufficient value-added buffers.
“Exposes fragility of raw-material-dependent export strategy with no value-added buffer,” Oye maintained, stating that beyond export earnings, he cautioned that the price slump poses systemic risks to trade finance and the banking sector.
Banks that financed cocoa purchases at peak 2025 farm-gate prices of between ₦1.8 million and ₦2.2 million per tonne are now facing reduced realisable values of about ₦1.2 million to ₦1.5 million per tonne, raising the risk of non-performing loans.
Exporters, he said, are trapped between high domestic procurement costs and falling international prices, while inventories bought at 2025 peak prices of $9,000–$11,000 per tonne are now valued closer to $5,000–$6,000 per tonne, resulting in devaluation losses of up to 50 per cent.
“With cocoa prices consolidating above recent lows but still far below their peak, Nigeria must urgently pivot toward industrialisation, diversification, and financial sophistication,” Oye said.
He called for accelerated domestic processing of cocoa into butter, liquor and powder to improve margins and reduce volatility exposure.
He urged diversification into new markets, including leveraging the Nigeria-UAE Comprehensive Economic Partnership Agreement signed in January 2026, to reduce dependence on traditional European destinations.
Oye also called for institutionalising commodity hedging through futures and options trading, creating a price stabilisation fund, reforming trade finance risk models, and investing in logistics and export infrastructure.
“By embracing these reforms, Nigeria can transform its non-oil sector from a temporary beneficiary of global price anomalies into a permanent engine of economic stability,” Oye added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
