European union (EU) pesticide regulations and cocoa trade with Africa: Evidence from Nigeria

Abstract

The cocoa trade plays a crucial role in the economic development of West Africa, including Nigeria, but the European Union (EU)—a major destination for Nigerian cocoa—introduced stringent pesticide residue regulations that could hinder exports. This study examined the impact of these regulations on Nigeria’s cocoa trade between 2000 and 2017 using both primary data and secondary data from the Food and Agriculture Organization, International Cocoa Organization, and National Bureau of Statistics. A difference-in-differences (DID) model was employed to estimate the policy’s effect. The findings show that the interaction, reform, and treatment variables significantly influenced cocoa export values. Consistent with expectations, the results indicate that the EU regulations initially exerted a negative effect on Nigeria’s cocoa exports from 2008 to 2012. However, the impact became positive and significant in the later period (2013–2017), suggesting short-run trade disruptions followed by long-run improvements. This shift likely reflects Nigeria’s increased compliance efforts, including mandatory pre-export testing of cocoa beans and the issuance of health certificates prior to EU border checks. To sustain and enhance export performance, the study recommends strengthening technical and financial support for farmers and exporters, and improving inspection and quality-control facilities at major export points.