High cost of raw and processed food imports

The disclosure that Nigeria spent a whopping N47trn within a 5-year period on the importation of raw materials and products which are abundantly available in the country and in which she obviously has comparative advantage over other countries sharply contrasts with the federal government’s public stance on growing local content and encouraging the consumption of indigenous goods.

According to a research finding published not long ago, between 2010 and 2015, Nigeria, rather than sustaining its local content policy by enforcing the ban on importation of raw and refined products that Nigerians have capacity to produce with relative ease, has been indecisive, thereby allowing indulgence in this avoidable luxury.

Speaking at a workshop in Abuja organised by the Raw Materials Research and Development Council (RMRDC), the Project Manager of the Strategy Implementation Task Unit (SITU) of the Council, Mr. Henry Eteama, regrettably listed 97 items for importation within the period.

The Council listed among others semi-milled or wholly milled rice, durum wheat, spelt, common wheat, meslin, frozen fish and birds, and other cash crops easily grown in the country but which surprisingly dominated our imported food items wage bills.

Although the Council revealed that the importation of nuclear equipment led with N9trn, vehicle and transport equipment at N8.2trn, electrical equipment at N7.3trn, and petroleum products at N3.4trn, it, however, frowned at the importation of fish, dairy products, plastics and cereals, in which it believes, Nigeria has comparative advantage over countries where these items were imported from.

Aside the stupendous amount of money spent on the importation of these products, the millions of jobs lost to foreign companies which have productively engaged its citizens invariably cast dust on the implementation of local content policy and deliberately discouraging indigenous entrepreneurial drive.

Notwithstanding the fact that the latest Nigeria Bureau for Statistics data have shown that Nigeria’s trade value had risen for the sixth consecutive quarter to N5.92trn representing a 3.94 per cent QoQ and 23.86 per cent YoY growth thus lifting the total exports value growth by 15.19 per cent QoQ and 53.85 per cent YoY to N3.57trn while total imports value declined from 9.41 per cent QoQ and 4.47 per cent YoY to N2.35trn, it remains worrisome that Nigeria still depends heavily on importation of raw and refined food materials.

To end the trend, the Federal Government has developed the National Strategy for Competitiveness in Raw Material and Product Development that will help to reduce importation by N3trn and create 4.4m jobs in five years.

However, it goes without saying that weak enforcement of the ban on the importation of raw and refined food materials and other cash crops in which Nigeria has comparative advantage over other countries is a serious cause for concern.

For one, without the political will to drive indigenous entrepreneurial spirit in the production of these raw and processed food materials through effective and implementable policies driven by foresighted and determined officials, dependence on foreign processed food materials which only feed the greed of shylock merchants to the detriment of small-scale manufacturers and entrepreneurs will persist.

The Federal Government must refocus, support and collaborate with local content drivers and bring to bear the essence of its ease of doing business policy aimed at stimulating production of raw and processed food items, which have abundant market even locally.

In this regard, the policy banning importation of rice and other raw and processed food items which Nigeria has capacity to produce should be pursued with vigour to ensure that local farmers reap heavily from their labour, boost employment drive and lay the foundation for the growth of small-scale industries in the country.

We urge the Federal Government to follow up the document developed by theStrategy Implementation Task Unit of the Raw Materials Research and Development Council which has a fiveyear short term plan, a 10-year medium term plan and a 15-year long term plan.

In the first five years, the document said that about 4.4m jobs will be created to employ fresh graduates, while saving the Federal Government N3trn from imports.

The document, however, suggested that for Made-In-Nigeria goods to be competitive both nationally and internationally, the raw materials have to be competitive in quality and price. This, indeed, is a task that must be accomplished if the economy must grow.

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