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Cassava Processing Industry Lose N4bn Investments As 200 Firms Shutdown



Cassava breeder, Chiedozie Egesi and agronomist, Joy Adele observing cassava leaves

There are indications that Nigeria Cassava processing industry could be fast going moribund as over 200 small and medium scale cassava processing firms have lost about N4 billion investments due to policy inconsistencies on the part of governments in the last 10 years. Experts said the nation’s Cassava policy, which gained impetus under the regime of Olusegun Obasanjo, is no longer influencing aggressive Cassava growing among farmers as processing firms are going extinct, shrinking its demand for industrial uses. Speaking on the impact of non-implementation of the Cassava policy of previous governments, national president of Nigeria Cassava Processors and Marketers, Engr. Ayo Olubori said the over 200 Cassava processing firms that shut down their operations each had set up with about N20 million from borrowed funds and pension savings by retirees, as well as equipment leasing amounting to N4billion.

Olubori told the LEADERSHIP that many of them who invested in the business are living in penury as the business has practically collapsed. He said Obasanjo’s administration came up with a Cassava policy which attracted massive investment but the policy appears to have been jettisoned causing loss of investments on the part of processors. Olubori who was former commissioner of agriculture in Ogun state, said the present administration raised the hope of resuscitating the industry, when minister of agriculture, Chief Audu Ogbeh announced plans to impose levies on imported starch, sweeteners, flour and ethanol in a bid to check food import bill and encourage investments in the processing of cassava, from which the products are obtained. LEADERSHIP reports that despite being the world’s largest producer of cassava, Nigeria still imports most of its industrial starch, a bye-product of cassava, a trend the federal government hopes to reverse under an industrial cassava policy, which when implemented, would see the nation saving about $700million or N252 billion (N360/$1) spent yearly on importing these products.
Olubori revealed that Nigeria spends about $1 million daily on wheat importation. LEADERSHIP gathered that while the current processing capacity stands at about 35 per cent, industries dependent on the bye-products from processed cassava may have no other option than to look inwards as government continues to explore measures to substitute importation by a way of imposing levies between zero to 60 per cent.

Operators in the pharmaceutical, textiles, bakeries, beverages, distilleries among other food sector operators dependent on starch, sweeteners and ethanol but importation has remained a viable option due to cheaper prices and inability of local suppliers to meet their demands. Statistics reveals that Nigeria currently imports 96 per cent of starch as local demand of 600,000 tonnes could not be met, while 200,00 tonnes or 100 per cent of sweeteners used in the country are currently being imported. For high quality cassava flour (HQCF), 88 per cent of the 504,000 tonnes demanded locally is being imported, a situation Olubori said is worrisome because local industries if encouraged can bridge the gap. By imposing levies on the imported products, the federal government hopes to improve local production of cassava starch to 1.4 million tonnes yearly by 2022 as well as increase investment in the sector. Olubori said that Cassava flour inclusion in bread and other confectioneries has the capacities to grow local Industry but the initiative is being frustrated thus encouraging massive wheat importation.

It is however learnt that Nigeria’s wheat production has seen an increase from less than 200,000 metric tonnes, MT, to close to one million metric tonnes, and farmers and other stakeholders are making moves to increase the production to two million metric tonnes, this year.This may save the country about $422.9m (N129.4bn) from importation of wheat next year, going by projections from farmers and other stakeholders that local production of the produce will increase to two million metric tonnes.This is in line with the Federal Government’s Agricultural Promotion Policy, which aims to reduce wheat importation by 50 per cent this year. The country currently imports 4.4 million metric tonnes of wheat at an average market price of $211.45/tonne. After several interventions in the sector by both the private sector and government wheat production has increased from less than 200,000MT to 900,000MT.

In 2015, the federal government funded a research into wheat that led to the development of two new varieties, LACRI WHIT -5 and LACRI WHIT -6, by research institutes, universities, crop scientists and private seed companies. These wheat varieties are high-yielding, have early maturity and better baking quality. Under its Anchor Borrowers’ Programme, the Central Bank of Nigeria, CBN has also supported the sector by granting loans to farmers at single-digit interest rates. The national president, Wheat Farmers Association of Nigeria, Alhaji Salim Mohammed, recently said that farmers were working hard to further increase the production and had projected that with the right equipment and incentives, wheat production should reach two million metric tonnes between the year-end and 2019. Recently, the Flour Millers Association, comprising Dangote Flour Mills, Honeywell Flour Mills, Olam Grains and Flour Mill Nigeria Plc, donated 50 threshers, each valued at N1.4m, to the farmers to help boost the production of the crop. Group managing director, Dangote Flour Mills, Thabo Mabe, said the association was encouraging mechanised wheat production so as to bring about increased yield. Local farmers are said to be battling rising production costs, which, according to the United States Department of Agriculture, have doubled in the last six months to $420 per tonne. Mabe said, “With mechanised farming, the volume of wheat per hectare increases. When the volume of wheat you get per hectare increases, the yield goes up. When the yield goes up, the cost comes down and the consumers will be happy because the prices of bread can be reduced in a sustainable manner. “The current unsustainable ways of ploughing and threshing is the reason why majority of the wheat in this country is imported. We are in the process of stopping this importation and driving Nigeria to self-sufficiency in wheat production.”



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