Nigeria is at risk of losing more than $1 billion in annual export earnings due to the European Union's new Deforestation Regulation (EUDR), as highlighted by the Nigerian Export Promotion Council (NEPC). The regulation mandates that exporters demonstrate that commodities shipped to the EU are deforestation-free and legally produced, which poses significant challenges for Nigerian exporters, especially in the cocoa sector.
The EUDR, aimed at combating climate change, requires comprehensive documentation and traceability for commodities such as cocoa, rubber, and wood. With cocoa exports to the EU valued at approximately 1.49 billion euros in 2024, compliance with these regulations is crucial for maintaining market access. NEPC's Regional Coordinator, Benedict Hegbe, emphasized that only about half of Nigeria’s cocoa farms have been geolocated, creating a significant gap in traceability. This lack of compliance could lead to reduced exports and economic instability, particularly for smallholder farmers who rely heavily on these markets.
Looking ahead, exporters must prepare for the EUDR's phased implementation, with large operators facing compliance requirements by December 30, 2026, and smaller operators by June 30, 2027. The upcoming launch of the National Single Window export module in November is a critical step toward streamlining documentation processes. Stakeholders are urged to enhance traceability systems and leverage technology to meet these new standards, as failure to adapt could jeopardize Nigeria's position in the global commodity market.