Agriculture plays a crucial role in the Nigerian economy, evidenced by its significant contributions to employment, revenue generation, wealth creation, poverty reduction, and the supply of raw materials for industrial development [1]. It is described as the largest non-oil export earner and the most important sector of Nigeria's economy, holding immense potential for future economic development as it has historically [2] Oyaniran [3] noted that the Nigerian agricultural sector accounts for 17.8% of the Gross Domestic Product (GDP) and employs approximately 42.7% of the total labour force. However, the country's agricultural potential remains largely untapped, posing significant implications for security and sustainable economic development.

The lack of development in agriculture is concerning, especially considering Nigeria's abundant agricultural resources and substantial efforts in agricultural planning. Adeniran and Oladun [1] listed some of the problems militating against agricultural development in Nigeria, including the following: poor financing, poor transportation network, poor storage and processing facilities, poor farmer's education, climate change, poor extension services, crude tools and machines, unstable policies and programmes of government, poor marketing systems, pest and diseases, shortage of agricultural inputs, environmental degradation, negative sociological and psychological attitude towards farming etc.

Poor agricultural output and widespread poverty have led to significant and persistent food insecurity in Nigeria, with studies indicating that up to 70% of the population is affected [4]. The agricultural sector in Nigeria faces numerous challenges spanning production, processing, preservation, and marketing [4]. These challenges stem from factors such as limited access to finance, inadequate supply to meet population growth and food demand, lack of value addition and supply-chain linkages, resource scarcity, conflicts, outdated agricultural practices, and various other issues [4], [5].

For a considerable period, cocoa has been a significant source of foreign exchange earnings for Nigeria. The country ranks as the fourth largest producer of cocoa globally, following Ivory Coast, Ghana, and Indonesia [4]–[6]. Cocoa remains vital among crops in less developed nations and is cultivated in over fifty developing countries across Asia, Africa, and Latin America [7]–[9].

It plays a crucial role in the Nigerian economy by providing employment and income for farmers, raw materials for industries, and foreign exchange earnings [6], [12]. Initially contributing about 15% to Nigeria's total exports in the 1970s [13], the cocoa sector now constitutes less than 1% of the country's export earnings [4], [5]. Despite this decline, over 200,000 rural households rely on cocoa as a primary source of income, significantly impacting the rural economy [5].

Cocoa was the predominant agricultural contributor to Nigeria's economy until the 1970s, when commercial quantities of crude oil were discovered in the country. Despite the discovery of oil, cocoa has remained a crucial and significant foreign exchange earner among the country's agricultural exports, maintaining its status as the foremost export tree crop [9], [14].

However, the production of this important cash crop for export has declined over the years due to various factors. Villalobos [15], Nkang et al. [14], and Afolayan[16] identified some of these factors as the discovery and exploitation of oil, which led to neglect of the entire agricultural sector, low yields, inconsistent production patterns, disease outbreaks, pest infestations, and reliance on rudimentary farm tools, ageing cocoa farms and cocoa farmers themselves and inefficient marketing channels amongst other factors.

Cocoa has played a significant role in the Nigerian economy over the years. Olaiya [17], in assessing cocoa exports as a reliable alternative revenue source amidst Nigeria's declining Gross National Product (GNP), highlighted cocoa as Nigeria's primary export crop both before and after independence, albeit with periods of fluctuating production and export levels. Despite the discovery of oil, cocoa exports remain pivotal in Nigeria's agricultural sector, although its contribution to the national GDP has waned [6], [18].

During the 1950s and 1960s, cocoa was a major foreign exchange earner for Nigeria, and the country was the world's second-largest producer. However, with increased investments in the oil sector during the 1970s and 1980s, Nigeria's global share of cocoa production declined. Cocoa, being heavily reliant on global market prices, especially in countries with free market systems, exposes farmers, particularly smallholders, to the necessity of adapting their farming practices to meet market demands [19]. This requires constant adjustment despite limitations in their production capabilities.

The relationship between exchange rates and agricultural production has been a contentious topic, continuing to spark debate among researchers. It is characterized as an empirical dilemma. While the majority of reviewed studies on this subject indicate that agricultural production shows a positive response to increases in the exchange rate, both in the short-run and long-run consistent with expectations, a few studies present contradictory findings [6].

Over the past three decades, research has documented a global increase in cocoa supply and demand, although maintaining equilibrium between supply and demand has been challenging. Fluctuations in cocoa prices are identified as a primary factor contributing to this imbalance [10]. Other influencing factors include agro-climatic conditions, input costs such as labour, fertilizers, pesticides, adoption of production technologies, competition with other crops, government regulations, and support services [10].

Cocoa, particularly in producer countries like Nigeria with free market systems, is highly dependent on world market prices. This vulnerability has become more pronounced in recent years, as Nigeria, classified as a Commodity Dependent Developing Country (CDDC), contends with multiple global crises in food, energy, climate, financial, and economic sectors. Consequently, cocoa farmers, primarily smallholders, must adapt their farming practices to meet market demands despite constraints on their production capacity [19].

the Sub-Sahara Africa

Despite the significant advancements made by the World Trade Organization (WTO) in expanding global trade by reducing barriers such as quotas, subsidies, and import tariffs, restrictions persist in the trade of raw agricultural commodities. These restrictions have hindered the anticipated mutual gains from trade as advocated by international trade theories [21], [22]. Agricultural commodity trade, among its many benefits, provides a variety of food choices for populations, maintains stable food supply and demand dynamics for efficient exchanges [23], [24], and stimulates economic growth, particularly in developing countries where agriculture constitutes a significant share of export products and foreign earnings.

In recent decades, there has been a significant increase in the study of international trade in agriculture and food globally [25]. International trade, dating back to the 16th century, has evolved with changes in the landscape of agricultural trade across the world. However, more emphasis has been placed on trade in processed food and agricultural products compared to raw agricultural products [24], which constitute a substantial portion of markets in poorer countries.

Ogini et al. [32] examined the short-run and long-run supply responses of cocoa in Nigeria to price changes and other factors. They employed a single supply response function and incorporated co-integration and Vector Error Correction procedures in their analysis. Overall, their study revealed positive supply responses from cocoa growers in Nigeria to changes in incentives.

Howai et al. [28] noted a significant decline in cocoa bean exports from Trinidad and Tobago, dropping from approximately 6,213 tonnes in 1970 to 517 tonnes in 2009, despite increasing prices during the same period. They investigated the supply response of cocoa farmers to prices and other factors using a modified Nerlovian model in logarithmic form. The regression results indicated a short-run price elasticity of supply of 0.36 and a long-run price elasticity of supply of 1.07. Additionally, variables such as lagged dry season rainfall and lagged wet season rainfall significantly influenced cocoa supply.

Samuel and Nahanga [36] analyzed cocoa production in Ghana from 1990 to 2011, employing Johansen co-integration and OLS regression methods. The co-integration test results revealed a long-run equilibrium relationship between cocoa bean production, area harvested, world price, cocoa exports, and Real GDP PerKapita (RGDPK), all of which were statistically significant. Furthermore, the OLS regression results indicated a positive association between annual CO and area harvested, as well as cocoa exports and RGDPK in Ghana. However, contrary to expectations, the results showed a negative relationship between cocoa bean production and the world price.

Gama et al. [29] conducted a study to assess the impact of cocoa export volume and cultivated area on changes in cocoa producer prices using data spanning from 1970 to 2018. They employed unit root tests, co-integration tests, and vector error correction models to analyze the data. The unit root tests indicated that all variables were integrated in the first order. The Johansen co-integration test was utilized to identify co-integrating relationships and assess the long-run effects of producer prices on the variables. Results from the Vector Error Correction Model revealed that cocoa producer prices adjusted slowly to changes in both cocoa export volume and area under cocoa production. In the short run, the analysis indicated a positive response of producer prices to cocoa exports, while the area harvested showed a significant negative relationship with producer price variations, on average.

Poku [30] investigated the impact of nominal exchange rate changes in Ghana on annual domestic producer prices of cocoa, a traditional export crop, and maize, a non-traditional export crop, spanning from 1966 to 2008. The study noted that nominal exchange rate changes in Ghana reflected a gradual transition from a fixed to a flexible exchange rate regime since independence. Using an Autoregressive Distributed Lag (ARDL) model, it was observed that exchange rate transmission was notably weak for both crops, indicating it did not significantly affect domestic producer prices of cocoa and maize in Ghana. For cocoa, market intervention was identified as the primary reason for this phenomenon, whereas the nature of maize as a non-traditional export with limited export supply contributed to the lack of exchange rate transmission in its sub-sector. Additionally, the transmission of world prices to domestic producer prices for both crops was also statistically insignificant.

The empirical results indicated that cocoa production and CO positively impacted agricultural investment, growth, and development. Conversely, lending interest rates hurt agricultural investment in Nigeria. Based on these findings, the study recommended that the government and stakeholders in the agricultural sector should enhance macroeconomic policies, such as interest rates, inflation management, and income levels, to foster increased investment that can positively contribute to agricultural development in Nigeria.

This study made use of secondary data which were majorly sourced from relevant national and international bodies and websites like the Food and Agricultural Organization (FAO), Nigeria Cocoa Board Cocoa Statistics (various issues), World Cocoa Foundation (WCF), world year currency book International Cocoa Organisation (ICCO), Nigeria's National Bureau of Statistics (NBS), which are released periodically across different issues. They include yearly world and producer price of cocoa, yearly production quantity (output), export quantity, and area harvested for the period under review. Trend analysis was used to achieve the study's aim.

As shown in Fig. 1, from the year 1980 to 1987, the yield oscillated between 2000 and 2500kg/ha, increased sharply from 1988-1994 and continued irregularly until 2007 when there was a sharp drop from the yield of the previous year. Thereafter, it continues to fluctuate steadily till the year 2020. The low yield from 1980- 1987 may be a result of the oil discovery in the country in the 1970s and 80s with the effort of the government to concentrate more on oil than agriculture as well as the adverse effect of the Cocoa Marketing Board [31] while the rise from 1988-1994 could be as a result of the success of the SAP, introduced by then-government, on cocoa production [4], [15], [16].

It was shown in Fig. 2 that 1988-1994 witnessed a steady rise in annual production, then a sharp decline in 1995, another sharp increase in 1996-1998, followed by another decline in 1999. Then, 2000-2006 showed a continuous rise in annual production, which may be attributable to the National Cocoa Rehabilitation Programme established in 1999 [32]. Another sharp decline from 2007-2009 indicated the poor performance of the Cocoa Rebirth Programme launched in 2005 by the federal government. A slight rise in 2010, followed by a decline from 2011-2016 and finally, a gradual rise from 2017-2020.

As shown in Table 2 and Fig. 6 a period of relative stability from 1980 to 1985, where the exchange rate was maintained at less than one Naira per US dollar due to a fixed exchange rate regime. However, this fixed regime led to an overvaluation of the Naira and significant economic distortions, including high imports of finished goods. This situation negatively impacted domestic production, the balance of payments, and the nation's external reserves, prompting the adoption of the SAP in 1986. Under SAP, the Central Bank of Nigeria (CBN) introduced the Second-tier Foreign Exchange Market (SFEM) to implement a more flexible exchange rate regime. Despite this flexibility, the Naira depreciated sharply, with the annual average exchange rate increasing from 2.02 Naira to the US dollar in 1986 to 17.30 Naira in 1992 and 22.05 Naira in 1993. It was stable between 1994 and 1998 (21.89 Naira to a US dollar) as a result of the introduction of the Dutch Auction System by the CBN to curb excessive demand (with its characteristic pegging). Again, in 1999, signalling the new era of democratic dispensation, there was a meteoric rise in the level of depreciation from 21.89 Naira in 1998 to 92.69 Naira in 1999 and 133.5 Naira in 2004. The Naira managed to appreciate against the US dollar from 132.15 Naira in 2005 to 118.57 Naira in 2008 but depreciated again in 2009 to 148.88 Naira and did not appreciate again till year 2020. The global financial crisis that peaked in the year 2009 and episodes of oil price volatility in the international oil market, among other factors, are responsible for the continued depreciation of the exchange rate from 2009 till 2020.

As shown in Fig. 3, the official and parallel exchange rates have evolved over the decades as a result of different policies adopted in different regimes. As evidenced in Fig. 4, the variation, however, became very pronounced from 2015. Despite narrowing initially after the introduction of the Investors and Exporters (I&E) Foreign Exchange Window in 2017, the gap subsequently widened again [14]. While the official rate was 192.44 Naira to a US dollar in 2015, the corresponding parallel rate was 222.79 Naira, a 15.77% margin. In 2016, the margin became wider at 47.01% and dropped to 29.31% in 2017 as a result of the introduction of I&E windows. As shown in Fig. 5, the data hovered between 1,000,000 and 1,400,000 hectares from 2002 to 2020, with a volume of 1,002,000 hectares as the minimum within the period in the year 2003 and 1,359,550 hectares as the maximum in the year 2007. Trade liberalization policy was found to be an essential driver of competitiveness, encouraging the production and export of cocoa and, subsequently, an expansion in the area of land cultivated/harvested. This may be a reasonable justification for the steady rise in area harvested from 1989 to 1999. The sudden increase in the area harvested in the year 2000, sustained in 2001, may be the positive response of cocoa farmers to the National Cocoa Rehabilitation Programme of the Nigerian government established in 1999 [10], which also caused the rise in cocoa production from the year 2000-2006. Ondo, Osun, Oyo, Cross River, and Ekiti are traditionally known for cocoa production in Nigeria. These states accounted for a larger percentage of the total area harvested, with Cross River taking the lead, followed closely by Ondo [16]. The latter entry of some other states into the cocoa production business in the country may also contribute to the increase in the area harvested over the years.

The study examined the spatio-temporal analysis of cocoa production and exports in Nigeria. The variables reviewed are key aspects of cocoa production, such as CO, YE, and exports (CEX). Secondary data spanning from 1980 to 2020 were sourced from reputable national and international sources such as the FAO, publications from the CBN including Statistical Bulletin, Economic and Financial Reviews, Annual Reports, and Quarterly Bulletin of Cocoa Statistics. Analytical tools employed in the study included descriptive statistics (graph).

The result showed that cocoa export is significantly determined by COs, which in turn add value to the exchange rate. Based on the findings, the following recommendations were suggested:

I. Cocoa farmers should step up their game to achieve increased production and export more cocoa produce. II. The government should support the cocoa farmers by providing improved seedlings, fertilizers for the farmers.

III. The government should educate the farmers on how to grow cocoa in line with the current global standard.

The authors appreciate the editor and reviewers for a job well done in reviewing and publishing this manuscript.

ODG: conceptualization, writing – original draft; AIM: resources; AEO: supervising, proofreading; the authors read and approved the final manuscript.

This research received no external funding.

Not applicable.

The author declares that there is no conflict of interest.