The oil boom that lasted from the early 1970s until about 1983 spawned a phenomenal expansion of the Nigerian economy. Within a few years, oil revenues rose from 1·4 billion naira in 1973 to 12·86 billion naira by 1980. The oil boom led to the assigning of substantial sums of money to the cocoa industry of southwestern Nigeria. In spite of these investments, the cocoa industry stagnated during the oil boom years. Using oral interviews and archival documents, this paper examines structural change in the cocoa industry before the oil boom, and analyses the failure of government rehabilitation programmes during the oil boom years.