With imported tomato paste products currently flooding the Nigerian market, Dangote tomato factory has resumed operations after the facility was closed in 2016. The plant, located at the government area of Kano state, has the capacity to produce 1,200 tonnes of processed tomatoes.
Managing Director, Dangote Tomatoes Farms, Sani Kaita, explained to the Guardian that the multi-billion dollar factory has resumed work after initially facing difficulties, some of which include continued importation of tomato paste, shortfalls in the supply of fresh tomatoes and power failure.
“Dangote Tomatoes Factory came on stream essentially to meet local consumption … but when we started, our major challenge, among other issues, was the importation of foreign paste despite the ban placed on it. The factory couldn’t survive because we don’t have orders. The dealers relied on imported products,” Kaita said.
The Federal Government had earlier placed a ban on importation of tomato paste and increased the tariffs on imports of tomato concentrate from 5 percent to 50 percent in order to revive the sector. However, the policy has not been effective owing to smuggling cartels through land borders.
The investment in setting up the factory is aimed at complementing federal government policy on diversification through agricultural development and also to check post-harvest losses, boost self-sufficiency and reduce huge foreign reserves being spent on importation. But according to Kaita, the government would continue to deplete huge foreign reserves and job opportunities until importation of paste is completely outlawed.
The tomato situation in Nigeria
Nigeria produces about 1.8 million metric tonnes (MT) of tomatoes annually but about 45 percent of the domestically produced tomatoes are destroyed before they reach the market. This is attributable to bad roads, exposure to weather, poor handling of the crop post-harvest, and inadequate storage facilities. All these factors are especially important because of the fragile nature of the fruit and its short shelf life.
More so, there is not enough domestically produced tomatoes to go around as consumption rate stands at around 2.4 million MT annually. This means a supply gap of about 500,000 MT is bridged with imported products and 150,000 MT of concentrate are brought into the country per annum.
Despite the increase in tariff on tomato importation with a $1,500 levy per tonne, imported tomato paste still floods the domestic market. This is because of the huge supply deficit in the economy and the porous nature of Nigeria’s borders.
Nigeria has the capacity to grow and export processed tomatoes. Currently, it is the second largest producer of tomatoes in Africa and the 14th largest in the world. However, there are only a handful of tomato processing plants in the country with Dangote being the largest.
Last month, Minister of Agriculture and Rural Development, Chief Audu Ogbeh, disclosed the federal government’s resolve to finally ban the importation of tomato products into the country. He blamed the continued importation of tomato paste for massive job losses to foreign countries, a situation which had further impoverished local farmers and denied them of a better life.
Addressing the issue requires more than just placing a ban on importation. The government needs to encourage local production through incentives for private sector to invest in processing plants. Also, demonstrating strong commitment to infrastructure development (road and power) is crucial, while addressing the situation at the borders.