Economic Diversification: How Sanwo-Olu is driving Lagos as West Africa’s champion in Coconut Value Chain

By Moses Adeniyi

Diversification of the economy in Nigeria has been a subject at the top burner of national discourse in recent times. This holds symmetrical bearing to the Lagos State economy which accounts for over 80 per cent of Nigeria’s Foreign Trade Flows and contributes over 50 per cent to the non-oil GDP (Gross Domestic Product) value of the entire Country. Against the pervasive allusion that the State is constrained by perceived land limitations to make waves in Agriculture, this report however shows strides the State is making in one aspect of the Agriculture sector which may not largely be known to many. Recent strides the State Government is making in the coconut value chain as a subsector of Agriculture, is reflecting new developments pitching it to the height where the State is presently standing as the hub championing coconut value chain in West Africa.

Presently, the processing needs of  several Countries in West Africa are met in Lagos. Besides processing capacity, the State has been making waves in the entire coconut value chain which encompasses Production (cultivation), Processing, Commercialisation, and Utilisation architectures, with increased attention and responsive strategies channeled towards the industry by the present Babajide Sanwo-Olu led administration.

According to report gathered, with the coordinated efforts deployed to the value chain by the present administration, projection of the transactional profile of the value chain is pegged to soar up to about N500 billion in four years. It was gathered that presently, over 1.5 million coconut seedlings have been produced from the State for onward cultivation across the Country, as the State stands at the vanguard of driving the awareness over the economic potentials in the coconut value chain.

Earlier this month, the Minister of Agriculture and Rural Development, Sabo Nanono, had  disclosed that the revenue that accrued to Nigeria’s coffers from the export of coconut oil and coconut derivatives for 2020 summed up to $150million with a projection of $250million for 2021. It is on record according to statistics, that of the entire productive value, Lagos cater for about 70 per cent.

As the present administration continues to muster efforts towards developing the industry to a virile height of substantial contributions to the GDP, giving assessment to the comparative advantage of the State in this aspect of agriculture towards the drive for the diversification of the Nigerian economy becomes imperative. Hence, a resource person in the front line of the course, the General Manager, Lagos State Coconut Development Authority (LASCODA), Mr. Olakulehin John-Oladapo, in this interview with Moses Adeniyi, gives depth of insights into the navigating paths of the State’s strategies in championing the development course of coconut value chain in West Africa, particularly since the last two years. Excerpts:

Recently, the Minister of Agriculture and Rural Development, Sabo Nanono, had  disclosed that the export value that accrued to Nigeria from coconut oil and its derivatives for 2020 summed up to $150 million with a projection of $250million for 2021, how do you comment on this?

Starting from the submission of the honourable Minister which is very valid in terms of what the Country generated from Coconut value chain in 2020, I want to state it that within the last three years a lot of things have been happening within the coconut value chain. However, since it is a tree crop, it is not going to be visible quickly. The fact remains that a lot of activities have been going on in this regard and in fact I can say that the honourable Minister was very conservative in the figures when we consider the development in coconut value chain in Nigeria generally.

Can you trace the developments in the coconut value chain as an industry within the last two decades?

Before the advent of soya bean oil, coconut oil used to be the mainstay of demand worldwide. However, in the 1960s when soya bean oil came, it was considered an alternative to coconut oil. This is largely because of its nature as an arable crop which can be grown and harvested within six months, compared to coconut which will take up to five to seven years before it starts fruiting. By forces of the market, soya bean oil overtook coconut oil. So, from the 1960s up to the last 10 years, the fortune of coconut oil had been dwindling because people have been demanding for soya bean oil which is considered as an alternative. However, nature will take its course no matter what is done. Therefore, within the last 10 to 15 years, there has been an increase in awareness on the benefits of coconut, particularly the health and environment benefits. Hence, there has been a shift of attention to making use of coconut and its derivatives, basically because of its health benefits. In 2018, the World Atlas reported that the demand in coconut product increased by 500 per cent worldwide and the demand is on the increase as the awareness also increases. Unfortunately, the farmers that are producing coconut have been disappointed over the poor demands that persisted. So, when you go to Asian Countries and even Nigeria, it became naturally unattractive at some point in the 1970s. So, farmers are not replacing old coconut trees. This is not peculiar only to Nigeria; it is a worldwide trend. However, when awareness on the utilities of coconut particularly as part of human diet increased, the attention began to increase. For instance, coconut derivatives constitute part of the ingredients that is used in weight loss therapies. It is then that coconut stakeholders came to the resolution that if something is not done quickly, it might be difficult to meet the rising need by the time the awareness becomes very strong.

Fortunately for the Lagos State Government, we saw this trend. So, for Lagos it was a conscious move. We were able to see that the way the trend is going, a time would come that coconut would be on the fore of demands. So in 1998, the Lagos State Coconut Development Authority (LASCODA) was established. The function of the Authority is to promote the production, processing, commercialisation and utilisation of coconut value chain. The production centres on seeing to replanting of old coconut trees. Processing centres on how to develop small scale processors for processing the products. Commercialisation centres on seeing to improving the transactional value of coconut. The utilisation pillar has to do with how to enhance utilising coconut within the value chain because it is when the utilisation of coconut is enhanced that the commercialisation will be improved which will in turn impact on the producers and farmers. These constitute the four major functions the Authority was established for. Since 1998 when it was established, the Authority has been working to ensure that we keep the flag of coconut not only in Lagos but in Nigeria generally. We thank GOD Lagos State had established this Authority, because if not so, by now we would not have been hearing of anything about coconut in Nigeria, because it is the Authority that has been keeping the flag going.

Fortunately, the inception of the Governor Babajide Sanwo-Olu led administration coincided with when the awareness of coconut came up in Nigeria. When he came to office and realised the level of awareness and the need, he gave us concrete, visible and impactful support and that finds expression in the submission of the honourable minister who made it clear that Lagos contributes the largest quota. From the submission of the Minister, about 70 per cent happens in Lagos. When Governor Babajide Sanwo-Olu came into office, he considered the question of what can be done to enhance the value chain and the support started coming in.

Production

Firstly, we looked at the seedlings that the farmers must plant, because seedlings to coconut farm is like a day old chick to poultry. The technology to produce coconut seedlings is not so easy. It is within the capacity of the Lagos State Coconut Development Authority, and Nigeria Institute for Oil Palm Research (NIFOR) and few other private enterprises to produce seedlings for planting. This has been a major bottleneck which has been hindering the cultivation of coconut. We also realised that the vision should not be restricted to planting coconut in Lagos State alone, because as of now 90 per cent of processors of coconut products are in Lagos State. This shows that even if we use the whole of Lagos to plant coconut, we will still need coconut supply to meet the rising processing need in Lagos. Hence, we embarked on concious massive production of coconut seedlings for Lagos farmers and for farmers outside the State. For Lagos farmers, the seedlings are made available at subsidised price. As at the end of 2020, from the inception of this present administration, we have produced more than 1.5 million coconut seedlings  either directly or through contract growers. We give support to contract growers once we know that they have the capacity and are acquainted with the technical know-how. We are rendering this support as a government scheme. For instance, we have about four nursery stations dedicated to coconut seedlings production. As I have said however, we cannot meet the need, so we have some farmers called outgrowers that we have certified, who also sell their seedlings at the market. So, the arrangement is not a sort of Public Private Partnership (PPP) arrangement but a certification and empowerment; they are producing but we are supporting them in terms of providing them with the market, giving them technical know-how because we know that what they are going to be producing is a function of what will yield result in the next 5-10 years. So, we are preparing grounds for them In terms of quality assurance and recommendation. So, the arrangement is not strictly bound by a collaboration as in PPP. As I have said, we have produced over 1.5 million seedlings, 70 per cent of which are planted outside Lagos. At the tail end of 2020, there was a farmer in Nasarawa state who bought about 10,000 coconut seedlings from us.

We have farmers from Nasarawa, Delta, Osun, and Oyo among others, to whom we have supplied thousands of coconut seedlings. In Lagos here also, we have a number of farmers that are going into cultivated coconut seedlings who have acquired land to plant coconut like it is done with oil palm. We are encouraging more investors to come into cultivation of coconut. There has to be a correction of the impression that coconut can only be cultivated along the beach alone. No! This is only a myth. Where ever oil palm is grown, the possibility that coconut will also do well there is close to 90 per cent and that is why the Research Institute, NIFOR in Benin, managing oil palm is the same managing coconut. NIFOR has been collaborating with us on the achievements we have been talking about. They have been giving us research backing on our efforts.

Apart from that, the beach from Seme/Badagry to Ibeju-Lekki is about 180 kilometres. Those who grew up in Lagos in the 1970s and 1980s will tell history that even at the bar beach, what we used to have there is coconut. The wall provided by these trees which is called green wall, is serving a particular purpose; no other crop can withstand the wave of the ocean.

However as I have said, between 1960s and the 1980s when there was a neglect in coconut what affected the cultivated coconut also affected those trees at the beach. Therefore, instead of replanting to replace the old ones, the old trees were abandoned. Why we  experience coastal erosion and the likes, is as a result of the wall not being there again because there is nothing to shield the land form the waves. So, part of the directives the Governor gave to us was to give  seedlings to farmers along that coastlines and we gave close to 200,000 seedlings basically for the beach. It was an empowerment. Hence, apart from where we have jetties, ports and other infrastructures, we want to build the wall back again with coconut. Fortunately, I must say that there are a lot of NGOs which have been showing interest. There is an NGO aiming at building the Oniru beach wall and some other walls with coconut.

We are also increasing awareness on the fact that even if it is going to take time, it is profitable to plant coconut. Apart from this, we also encourage urban coconut production. The idea is that even if the space you have in your house is limited, you can plant coconut. Coconut has been described as the tree of life and with a coconut tree you can survive. From the coconut tree, you can eat, build, and do several other things. Hence, you can survive on it and that is why in some Asian Countries, it is called the tree of life. We are still using this opportunity to call on investors to invest in the coconut value chain. The Lagos State Government is ready to give necessary support. For farmers within Lagos State, the seedlings will be subsidised and for those outside the State, we will still support by way of  agreement and ensuring that they get quality coconut seedlings.

However, given that coconut has a long gestation, it will take quite some time to see the results; but I can assure that people are investing massively in coconut production courtesy of Mr. Babajide Olusola Sanwo-Olu. I am saying this without flattering, but rather because of the profound interest he has shown to the coconut value chain.

Processing

I will tell you that while the last record of the production capacity in Nigeria shows that Lagos State is responsible for about 70 percent of coconut production in Nigeria, it is observable that this statistics might have changed in the last couple of years. However, if there has been any change, such would be insignificant to Lagos State’s status as the mainstream of coconut production in Nigeria because the attention of other States to the cultivation of coconut only started in about four years now. Therefore, the effects might not have much changes on the contributory status of Lagos. However, the fact that is very significant to note is that because there has been an increase in the demand for coconut products, we now have a lot of processors coming into that value chain.  Hence, there has been an increase in the need for seedlings. Without mincing words, Lagos as development unfolds may not alone be able to absorb the entire processing need of coconut into other finished goods as oil, flour among others in Nigeria. About 60 per cent of the coconuts we use in Nigeria presently for processing are coming from the west coast of Africa. These countries are bringing their nuts down to Lagos for processing. We are doing a lot to enhance local production of coconut, hence we cannot wait until when the boom in local production overwhelms the industry before we start expanding our capacities. The local production presently cannot meet the processing need, hence there has been an import of about 60 per cent of nuts to feed the processing capacity of Lagos. There is no issue with that because if we can export our Cocoa to Belgium, England and other Countries, for processing and get back the finished products, there is nothing wrong in Nigeria being like West coast to coconut. In this case, they can bring their coconuts and by the time it is brought into Lagos, we add value and by this we are creating more employment. When you bring coconut into the State for processing, there are  layers of employment that would be created. There are those who would process the cracking, which is just one among other the layers in the processing line. Although we may have challenge with the processing need, I can assure that with the level of commitment of Lagos State in creating awareness beyond the shore of the State, there are humongous prospects ahead. We have been encouraging domestic planting of coconut. On average, a coconut tree is supposed to give a 100 fruit in a year and you may not consume everything. Hence, you would release some to the market. If we therefore have 20 houses in a street, then on aggregate you have about 2,000 coconut fruits. By this, we are also boosting urban employment. In doing this, there would be a reduction in the import of coconut for processing. With the efforts we are putting into the value chain, I can assure that in the space of two to three years when the cultivated coconut start yielding fruits, we would not have to rely in any way on the west coast imports to meet the gaps of the processing capacity. By the time the about 1.5 million seedlings we have pushed to farmers for cultivation begin fruiting, the need for import will be relatively unnecessary. In our nurseries, we presently have about 100,000 seedlings ready to be pushed to farmers. Hence, in the next four to five years, the processors would not have to rely on import. These are part of what we are doing and we are  doing so aggressively. In this case, if the coconuts are brought in, it is our processors who would determine the price based on the available forces obtainable. Hence, the acceptance of imported products will be by choice.

Commercialisation

Presently, Lagos has become the hub of coconut value chain in West Africa. It is believed that it is until when you get to Lagos in Nigeria, that you can get the best coconut oil. This has been the prevailing impression. And when we talk of perception, it means the reality. So, we now have a lot of processors, and of course, commercial activities of coconut have increased. As of 2019, records of the transactional value of coconut value chain in Lagos is about N76billion per annum. If we sustain these efforts, our projection based on a survey we carried out in 2019, is that the transactional value of the coconut value chain in Lagos will be as high as N500 billion by 2024. In this direction, this will boost internal revenue generation for the State directly and indirectly. A lot of commercial activities within the coconut value chain is going on with increase. One of the major things the State Government is doing is to organise this subsector. What we want to do in this regard is that we want to know every player in the coconut value chain — be it the farmer, processor, transporter, among others. Here, we are not talking of marginal users of coconut, but rather stakeholders involved majorly in coconut dealings. In this regard, we would have a dedicated website for this purpose. This is a conscious effort which goes in line with the establishment of the Authority. When you look at the emblem of Lagos State, you would see two coconut trees. This is symbolic and nullifies the argument that Lagos State is not agrarian. The question here is how many state in the Federation has a dedicated Authority for a specific crop. It is apparent it is only Lagos which has such Authority dedicated to a specific enterprise in agriculture. This shows the value the State places on this subsector of agriculture. Once we have the dedicated website, any stakeholder dealing in coconut wlll have his/her profile on the platform. In this regard, the detailed profile of each stakeholder, what he does in the value chain, and his productive capacity can be assessed any where around the world. Coconut is one of the heritage of Lagos State and we want to sell it to the world.

Already export of coconut oil from Lagos State have been taking course, but the concern is to make this more visible. In this way, we are working very hard on creating an enabling environment for cultivators and processors to make the coconut value chain virile in the State. Activities in the commercialisation of coconut is increasing daily. We have dedicated markets in Badagry and Ojo, where the  activities carried out revolves majorly around coconut. At least, no less than six trailers of coconut fruits move out of these markets on daily basis for transactions within and outside the State. So, we want to strengthen the commercialisation of coconut in the spirit of making Lagos State a 21st Century economy. In this sense, we are going to be projecting stakeholders in the market to the world towards the benefits of the Lagos economy.

To be continued