As Tomato Industry Gets Another Policy Boost
The federal government’s new policy which aims at boosting tomato production, improving the value chain and attracting investment by addressing a situation where Nigeria has become a major global net importer of tomato paste, while over 40 percent of her total local production of tomato was usually being wasted has been applauded by the stakeholders in the sector, writes BAYO AMODU.
Stakeholders in the agric sector of the nation’s economy have been commending recent announcement of the federal government at reducing the N52 billion ($170 million) spent annually on importing 150,000 metric tons of tomato into the country.
The Minister of Industry, Trade and Investment, Dr Okechukwu Enelama, who announced the new policy at a press briefing in Abuja on Tuesday said it is part of the federal government’s National Industrial Revolution Plan in line with its objective of boosting tomato production, improving the value chain and attracting investment.
The policy, according to him, is to be implemented in collaboration with the Federal Ministries of Agriculture and Rural Development, Finance, and Water Resources; and the Central Bank of Nigeria, Bank of Industry and the National Food and Drugs Administration and Control. The plan, according to him, will discourage the importation of tomato concentrate into the country as tariff on importation of tomato concentrate among others is increased from 5 to 50 percent with an additional $1500 per metric ton.
This, according to him, is targeted at increasing local production of fresh tomato fruit required for fresh fruit consumption and processing; increase local production of tomato concentrate and reduce post-harvest losses. When properly implemented, the policy is expected to curb 40 per cent wastage and create 60,000 direct jobs.
“These include ‘classification of greenhouse equipment as agricultural equipment to attract zero per cent import duty. Ban on the importation of tomato paste, powder or concentrate,’’ the minister said.
The new policy measure also restricted importation of tomato concentrate to the seaports to address the abuse of the ECOWAS Trade Liberalisation Scheme (ETLS); inclusion of tomato production and processing in the list of industries eligible for investment incentives administered by the Nigeria Investment Promotion Commission (NIPC) among other policy action.
Enelamah stated that “this new policy is at the core of the Nigeria Industrial Revolution Plan (NIRP), which prioritizes agro-allied businesses, an area that we have comparative advantage”
He continued: “these measures ultimately, accelerates the growth of the manufacturing industry and deepens diversification. Nigeria imports an average of 150,000 metric tons of tomato concentrate per annum valued at $170million mostly due to inadequacy in capacity to produce tomato concentrate. Current demand for fresh tomato fruits is estimated at about 2.45million metric tons per annum (MTPA) while the country produces only about 1.8million MTPA”.
On the Made in Nigeria initiative, Enelamah commented that the FEC approved the Made in Nigeria patronage initiative to stimulate local production, create employment and patronage of Made in Nigeria goods and services.
It is a fact that Nigeria’s economy, over the past few years has trended downwards, shocked out of its restful state by the 2014 crash in the price of oil, the country’s main source of revenues and exports.
The FMITI in response to the urgent need for recovery and reform embarked on the preparation of the diversification & growth plan, to help increase job creation, reduce Nigeria’s vulnerability to external shocks, and increase investor confidence in the Nigerian market. As a result of the urgency of the situation, the FMITI commenced plans to implement the most urgent projects and achieved the first tangible results.
These plans, as contained in a document released by the ministry which was obtained by LEADERSHIP, has three core pillars and five foundational enablers: ‘‘These three core pillars include: Implementation of the Nigerian Industrial Revolution Plan (NIRP); support Micro, Small & Medium Enterprises (MSMEs); support the digitalization of the Nigerian economy.
Also, the five foundational enablers include: Establish an Enabling Business Environment (EBE); develop Special Economic Zones (SEZ); establish 21st century trade/free trade agreements; attract domestic and foreign investments and institutionalize the Structural Reform Agenda (SRA).
With the NIRP, FMITI is aiming to broaden the scope and accelerate the growth of the Nigerian manufacturing and industrial businesses, with a special focus on agribusiness and agro allied industries. This includes for example auto assembly and component manufacturing, mining, sugar, food processing, textile and garments, palm oil, and leather. FMITI initiatives currently underway within the NIRP include: FG approved Nigerian Automotive Industry Development Plan (NAIDP) and roadmap implementation which has begun with sugar, tomato, textile and garments.
On the second pillar which is to Support Micro, Small, and Medium Enterprises (MSME’s), FMITI is working in partnership with the BoI and other relevant government departments to support MSME’s through funding.
Specific FMITI initiatives currently underway include: The GEM (Growth and Employment) initiative in collaboration with the World Bank. More specifically, The GEM initiative allowed to identified 23 IDAs (Industrial Cluster Areas) to support MSME’s with capacity development and launch the ‘BIG platform’ funding initiative to provide funding and training for MSME’s Support the digitalization of the Nigerian Economy: In order to keep up with the rapidly transforming global economy, Nigeria’s digitalization has to be accelerated. MITI digitalization initiatives currently underway include: The establishment of the Smart Digital Nigeria Economy Project, as the baseline strategy for the digital-led growth of the Nigerian Economy.
As for the five foundational enablers plan to establish an Enabling Business Environment (EBE), the FMITI revealed that Nigeria is still considered one of the most difficult places to do business in the world, with a 169 (out of 189 countries) position in the World Bank’s Ease of Doing Business ranking.
As a result of this, the FMITI is embarking on executing a presidential, inter-ministerial initiative to improve all the facets of doing business within Nigeria.
Also, the ministry seeks to develop special economic zones (SEZ’s) with the aim of facilitating the setup of special economic zones throughout the country. Under this, its specific goals include to help overcome the infrastructure disadvantages faced by local manufacturers, and promote the cluster effects gained by locating similar manufacturing businesses together.
‘‘The FMITI is currently running a feasibility study for the development of 6 SEZ’s and securing N50billion in the Nigerian budget for the first development phase to be launched in 2017. Other financial partners such as Afreximbank and EXIM bank of China have also committed $1bn to the setup of special economic zones within Africa.
‘‘One critical aspect of this is to establish a 21st century trade/free trade agreements. FMITI is negotiating 21st century Nigerian free trade agreements, with the goal of expanding market opportunities for Nigeria’s companies. To this effect, FMITI has engaged several key initiatives.
‘‘Another one is attract domestic and foreign investments: FMITI is working with the Nigerian Investment Promotion Commission (NIPC) to enhance investments in Nigeria and reverse the overall decline of FDI inflows. Key achievements include important Investment Promotion and Protection agreements signed with Singapore and UAE and Investment roadshows in China, Germany, Singapore, Turkey, UAE, UK, and US
‘‘Our plan is extremely ambitious and we are perfectly aware that the challenges we will have to face. To be successful, the MITI has created a dedicated task force to manage the entire program and guarantee long-term success of the Nigerian Diversification & Growth Plan,’’ said Enelamah.
Meanwhile, the spokesman of the Tomato Growers Association of Nigeria, Richard Mbaram said placing a punitive duty regime on tomato imports was an appropriate policy stance. He said: “Nigeria had the in-country capacity to produce enough for its local demand and export to other West African states, but it has not exploited that over time because of policy challenges.’’
Mbaram lauded the policy, advising the government to be mindful of smuggling and the need for the Customs to be brought into its implementation.
Also some of the stakeholders who spoke with LEADERSHIP commended the federal government on the initiatives, the director-general of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, commended the policy and said it would promote and encourage local production of tomato and the creation of more jobs in the tomato industry.
He also urged government to create a balance between the welfare of the people and the economic philosophy of economic nationalism in its policy by addressing major production problems like high cost of transportation, high energy cost, challenges of storage and processing of agricultural products, productivity issues, agricultural mechanization issues and many more that account for high food prices.
The chief executive officer, Erisco Foods Limited, Chief Eric Umeofia, who also acknowledged that the policy is not new but a good one, said: “The important thing is to implement the policy. The federal government should see to the implementation of the policy. If we support our industries, we will grow the economy and avoid people committing suicides.”
Umeofia who said Nigeria can be the largest exporter of tomato paste in several market in Africa and beyond in 18 months’ time, putting in place a friendly business environment, commended the policy adding that the step would help reflate the economy, stimulate local production, aid export of tomato paste and create jobs.
The President, Manufacturers Association of Nigeria (MAN), Frank Jacobs said the new policy needs to be enforced at an inter-ministerial level, supervised by the Presidency, because there is an aspect of economic sabotage involved in the problem which gave rise to the crafting of the policy in the first place.