Dearth of Local Tomato Plants: The Rot Continues
By Ayomide Oriade
Nigeria’s drive for a production based economy was dealt another huge blow when our very own renowned brand, Dangote announced an outright shut down of its new tomato paste plant in Kano earlier in the week.
Dangote is not the first brand to throw in the towel in the tomato paste business. It would be recalled that about 1,500 workers lost their jobs when Erisco Foods owned by a Nigerian, Mr. Eric Umeofia announced closure of its factory based in Oregun Lagos, in November 2016.
Both companies cited forex scarcity as reason for closure. A senior executive of Dangote Group, Devakumar Edwin, in an interview with a foreign news agency, Reuters, said “Where the foreign exchange is not available, we are cutting down our operations. For example, we had a tomato-based processing plant; we have shut it down,” referring to their plant in Kano.
One of the focal agenda of President Muhammadu Buhari’s economic agenda is national food security, under which the nation is expected to achieve self-sufficiency in food production. The citizens are being asked to explore the opportunities in the Agriculture value chain. One of such opportunities therein is tomato paste processing.
There had been calls from different quarters for investment in this section of the economic chain because Nigeria has a huge market for tomato paste consumption but doesn’t process it locally. Despite being Africa’s second largest producer of tomato with over 1.5 million tons harvested, Nigeria still spend N170 billion on importation of tomato paste concentrates annually according to figures from the Ministry of Trade and Investment.
The reason for this is not far-fetched. About 65% of tomato harvested in Nigeria perish during post-harvest period due to lack of good storage facility and transportation. What a waste! But in a broader sense, tomato rot isn’t the only waste. It comes with loss revenue, employment creation opportunities and technological advancement.
One of the identified ways to covert these wastes to wealth is investment in storage technology and establishment of processing plants to optimise exploration of tomato farm produce.
However, tomato paste processing is capital intensive, but also a lucrative business. The Indians had our same kind of problem years back. They relied heavily on importing paste. It was to an extent that their farmers were frustrated to the point of dumping tomato on roadsides in the country.
That is no longer the case, as there are now indigenous Indian tomato paste brands raking-in millions by taking advantage of their huge tomato production capacity and available market; thus growing their economy in the process. But on our shores, companies who have dared to venture into the business haven’t been encouraged by policies and enabling environment.
Erisco’s Ric-Giko tomato paste was already giving other foreign pastes a run for their money in the local market. The company’s factory with a capacity to produce 450,000 tonnes of tomato paste was inaugurated by Mrs Aisha Buhari in February 2016.
The factory was said to be Africa’s largest tomato processing plant, with a backward integration programme planned for Jigawa, Sokoto and Katsina, to supply its raw materials and generate employment for 50,000 Nigerians within three years. But it has stopped production and the owner is contemplating relocating to Ghana. Well, that’s not new. Ghana seems to have mastered the art of making our losses their own gains. We are the largest producer of Yam in Africa, but Ghana is the largest exporter. You can only guess how the latter attained its status.
But as usual, our technocrats know how to figure out the prospects, but not how to attain them. In their projection, the Federal Ministry of Agriculture says Nigeria can produce N32 billion worth of tomato paste annually. But going by the recent predicament of our local brands in the business, the prevailing resource rot and capital flight is not likely to end soon. And such projection will continue to be mere colourful headlines for media pages, except government moves fast to proffer a solution.
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