- Wednesday, October 16, 2024
Cocoa-industry activities in Nigeria are currently facing obstacles due to a nationwide strike organized by the country's two main labor unions. This strike, which is now in its second day, has led to disruptions in cocoa grading and difficulties in accessing funds for cocoa merchants and exporters.
Impact on Cocoa Grading and Access to Funds
In some cocoa-producing states, cocoa grading has come to a halt as public service workers have joined the strike. Additionally, commercial banks have closed, making it challenging for cocoa merchants and exporters to acquire the necessary funds to purchase cocoa. It's important to note that under produce laws, it is illegal to buy, sell, or export ungraded Nigerian cocoa.
Reasons Behind the Strike
The strike was called by the Nigeria Labor Union and the Trade Union Congress as a protest against the alleged mistreatment of NLC President Joe Ajaero and other members of the labor unions in Imo State. It also addresses other concerns regarding the Nigerian government.
Recent Government Initiatives and Their Impact
In recent months, the federal government removed subsidies on gasoline, and the Central Bank of Nigeria announced the float of the naira currency against major global currencies. These measures aimed to unify exchange rates within the country. However, as a consequence, the naira has depreciated by more than 40% against the dollar since June. This depreciation has significantly increased the cost of gasoline and diesel, leading to rising prices in electricity, food, housing, and other essential goods and services.
Potential Consequences of Prolonged Strike
If the strike continues for an extended period, the transportation of cocoa between states may become increasingly challenging. Moreover, moving cocoa from the hinterland to exporters' warehouses in Lagos is likely to incur higher costs. Consequently, this could elevate operational expenses within the cocoa sector and cause delays in cocoa arrival at ports for export.
As the strike persists, the cocoa industry in Nigeria hangs on the precipice, hoping for a swift resolution to resume normal operations.
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