Dangote’s 1,200-ton a day plant is producing at 20 per cent of capacity because farmers don’t have enough resources to boost acreage. The factory was meant to reverse Nigeria’s spending over $200 million importing paste from China and United States. But by 2017, the company had to idle the plant after pests destroyed vast swathes of the crop. It took another two years — and a resolution of a dispute over payment to farmers — for the factory to resume output.
“We haven’t been able to process enough quantity of tomato to make our operations successful,” said Abdulkarim Kaita, managing director of the Dangote Tomato Processing Plant. “At the moment, we are counting losses.”
The crisis at Dangote’s tomato plant is emblematic of the challenges faced by many businesses in Africa’s biggest economy. While tomato farming employs an estimated 200,000 people, banks balk at lending to farmers despite President Muhammadu Buhari’s focus on boosting local production. Such policy missteps, entrenched corruption and ethnic tensions are discouraging investments needed to add jobs in a nation that has one of the world’s highest unemployment rates.
Entrepreneurs say the crisis has been worsened by a central bank decision to keep an artificially high exchange rate which has dried up dollar supplies, forcing firms to buy them on the black market at a 40 per cent premium.
