Paste industry: Liberalising Nigeria’s economy with local contents

After recovering from the scourge of tomato bug invasion which wreaked havoc on the country in 2016, North-western Nigeria, the leading producers of tomato has resumed massive production of one of the world’s most-sought after veggies. KEHINDE OSASONA examines the possibilities of the paste industry recording comparative growth in production
Reports have it that around 80% of the tomatoes produced worldwide are consumed fresh, whereas the remaining 20% are utilized in the tomato processing industry. In Nigeria, investigation has revealed that despite challenges facing paste industry, competitiveness pervading in the industry has in a way strengthened the domestic market and it is on the verge of liberalizing the economy.
Despite the fact that before now, the fruit has experienced incessant wastages of high magnitudes due to poor post-harvest handling viz a vis storage, processing, supply gap and market opportunities etcetera which has been the bane of periodic scarcity of the produce and the seasonal high cost that consumers often complain of, it has been reported that ‘Between 53% and 72% of fresh produce grown in Nigeria perish before they can be consumed’ says the Agricultural Fresh Produce Growers and Exporters Association of Nigeria (AFPGEAN).
However, in providing a succor to the glaring challenge, as at the last count, ten tomatoes packing factories have now sprout-up in locations like Lagos axis, while other few fresh fruits processing plants are situated in the North-west.

The Tomato bug scourge: After the storm
Nigeria is the 14th largest producer of tomato in the world, second in Africa and the largest in the Sub-Saharan Africa. The 1.8 million metric tons of the crop produced annually are valued at N63 billion. However, in 2016, the country got her dose of exotic tomato bug which created crisis and huge loss in the paste industry while it lasted. It was learnt that the bug had reportedly ravaged tomato farms in Europe, Asia, South America, America and lately, Africa.
In 2016 during the rage, tomato farmers in Kano state alone lost over N2 billion to Tuta Absoluta attack. It was reported that within 3 months, over 80% of tomatoes perished in Kaduna and about 200 farmers in three LGA’s lost about N1 billion worth of their tomato.
Consequently, following the destructions, farmers in North-west and east axis of Nigeria bemoaned their losses in droves, while price of tomato rose uncontrollably. Just as the bug attacked and wiped away many tomato farms, seedlings, nurseries and plantations, price skyrocketed from N4,000 to N30,000 per basket in major capitals in Nigeria like Abuja, Lagos, Port-Harcourt and Enugu. Nonetheless, tomato farmers eventually heaved a sigh of relief when the federal government sought Food and Agriculture Organisation (FAO) collaborations in tackling the big menace. Also, the federal government through the Minister of Agriculture Chief Audu Ogbeh, equally worked closely with the National Horticultural Research Institute (NIHORT), a mandate agency on tomato research and development in Ibadan to produce technology that could help mitigate the Tuta Absoluta invasion.

Containing wastages and glut via processing
Experts said Nigeria is losing N28.4 billion worth of tomato annually to wastages and glut. Despite the fact that off-takers in Nigeria procured over 900,000 tons or a million tons of tomato for distribution across Nigeria and neighbouring countries like Togo, Ghana and Benin Republic on a yearly basis.
The Federal Ministry of Agriculture and Rural Development report indicates that in 2016 alone, Nigeria has market volume of 150,000 tons of tomato paste valued at N3 billion annually. In the same vein, the national output has also been at the average of 1.7 million tons, while the demand was put at 2.4 million tones. Analysts believed that with more paste processing industry springing up, there is likelihood of taming the incessant wastages and glut.

Will increased local production reduce exportation?
As a way of helping in enhancing value-chain competitiveness thereby cutting down the national import bill, Dangote Foods, a paste manufacturer has said it processed over 1,200 metric tons of tomatoes each day and produces 400,000 tonnes of paste annually. Apart from helping to meet Nigeria’s domestic needs, it has also assist in cutting importation of 300,000 tons worth of paste a year from China. The newly established Dangote tomato processing factory in Kano and Kaduna state alone mops up most of the available fruits from Kaduna, Kano, Jigawa, Katsina, Sokoto and Plateau States. In Kaduna state, not less than 12 LGAs engaged in tomato production in commercial quantity to feed Dangote paste industry.
According to IMARC Group, the global tomato processing market reached a volume of around 34 million tonnes in 2016. Over the years, lack of processing techniques has made Nigeria to rely on imported tomato products. Abdulkareem Kaita, Managing Director, Dangote Farms was quoted as saying; ‘’ We are going to work with the farmers, they can afford to produce more tomato fruits now that there is a processing factory and they don’t have to suffer losses as they did before.
‘’Our group recently launched a tomato processing plant worth $20 billion Dollar in Kano which is capable of producing over 400,000 tons of tomato paste annually. It is expected to reduce Nigeria’s dependence on imported tomato paste,’’ he said.

Between CBN forex policy and growth
Kenya, Nigeria’s East Africa neighbour reportedly earned about a billion dollars in fresh produce exports to European markets annually, while Nigeria struggles to earn $10 million annually on importation. Nigeria imported 189.5 metric tons of tomato paste in one year. Some of the products involved are canned tomato, paste, tomato ketch-up and other sauces for consumption. Meanwhile, stakeholders have attributed Nigeria’s inability to get enough machines sufficient for capacity growth and expansion to Central Bank of Nigeria’s stifling policy affecting local manufacturers.
The Chief Executive Officer, Erisco Foods, Chief Eric Umeofia alleged that the apex bank has continually stifled local manufacturers operations and growth. ‘’ We have bought over N4 billion Naira worth of dry and fresh tomato that ought to have wasted as usual from our local farmers,. But bit is just lying in our warehouse for lack of forex approval.
‘’The forex is to get enough machines sufficient for our capacity to convert them into quality raw materials for the production of tomato and to meet up with our packaging lines, to reduce our production cost,’’ he explained.
For instance, the Manufacturing Association of Nigeria (MAN), a key operator in the industry has insisted that in order to fully liberalize the economy and enhance local operators in the paste industry, the Central Bank of Nigeria must be made to amend its policy on forex to exclude triple concentrate tomato paste from the scope of the 41 items under the restriction list. To them, the development may lead to more paste industry closing shop which may affect the present quest towards liberalization.
An agricultural analyst, David Adelaja, explained during an interview that Nigerian economy cannot afford to loose such growing industry (Paste Industry) to local policy that can ordinarily be amended saying; ‘’ it will enable paste processors to thrive, not only that employees in the sector too would be able to keep their jobs,”

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