Through its recent policy, the federal government has banned the importation of tomato paste, powder, or concentrate for retail sales, as well as of preserved tomatoes. It also increased tariff for tomato concentrate, presumably for commercial use from five to 50 per cent in order to revive the tomato sector in addition to $1,500 per metric tonne. Ndubuisi Francis appraises the new policy
TIn the face of the nation’s economic malaise exacerbated by a foreign exchange (FX) crisis, many believe that import substitution is a potent weapon to conserve the badly needed forex. More reliance on locally made goods and services is believed to be an effective way to stimulate economic growth, create jobs and depend less on imported items, a chunk of which are sub-standard.
Nigeria is said to import an average of 150,000 metric tons of tomato concentrate per annum at a staggering value put at $170 million.
It is perhaps in a bid to check the huge capital flight and the pursuit of the Nigeria Industrial Revolution Plan (NIRP), which prioritises agro-allied businesses, an area that the country has comparative advantage that the Ministry of Industry, Trade and Investment (MITI) recently developed a new policy on tomato.
The policy tallies with government’s goal of boosting production, improving the value chain and attracting investment
With the policy, the government set out to stop the importation of tomato paste, powder or concentrate put up for retail sale.
According to the ministry, the tomato sector policy was developed and is being implemented in collaboration with the Federal Ministry of Agriculture and Rural Development, Federal Ministry of Finance, Federal Ministry of Water Resources, Central Bank of Nigeria,
(CBN) Bank of Industry (BoI) and the National Agency for Food and Drugs Administration and Control (NAFDAC).
The policy is imbued with certain specific objectives, including to increase local production of fresh tomato fruit required for fresh consumption and processing; increase local production of tomato concentrate and reduce post-harvest losses.
The unveiling of the tomato policy followed the approval by the Federal Executive Council (FEC) to enable the implementation of certain extraordinary price-based measures aimed at safeguarding Nigeria’s balance of payments in an environment of recession.
The price-based measures include:
Classification of Greenhouse Equipment as agricultural equipment in order to attract 0 per cent import duty, and the stoppage of the importation of tomato paste, powder or concentrate put up for retail sale.
Others are the stoppage of the importation of tomatoes preserved otherwise by vinegar or acetic acid, and increase in the tariff on tomato concentrate to 50 per cent with an additional levy of $1,500 per metric tons.
It also includes the restriction on the importation of tomato concentrate to the seaports to address the abuse of the ECOWAS Trade Liberalisation Scheme (ETLS).
There is also the inclusion of tomato production and processing on the list of industries eligible for investment incentives administered by the Nigeria Investment Promotion Commission (NIPC).
These measures will become effective 30 days after April 7, 2017, when the ECOWAS Secretariat was notified.
Commenting on the tomato policy, the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah said: “this new policy is at the core of the Nigeria Industrial Revolution Plan (NIRP), which prioritises agro-allied businesses, an area that we have comparative advantage.
“These measures ultimately, accelerates the growth of the manufacturing industry and deepens diversification.”
Nigeria is said to import an average of 150,000 metric tons of tomato concentrate per annum at a value put at $170 million, mostly due to inadequacy in capacity to produce tomato concentrate. Current demand for fresh tomato fruits is estimated at about 2.45 million metric tons per annum (MTPA) while the country produces only about 1.8 million MTPA.
Despite the supply gap, about 40 per cent of fresh tomato produce is lost due to wastage arising from poor post-harvest handling and inadequate storage.
The Ministry of Industry, Trade and Investment has however expressed its commitment to sustainable investment in the entire value chain of tomato sub-sector.
It believes agriculture and agro-allied processing are priority areas for achieving the ministry’s plan for growth and diversification.
By its projection, the new policy is expected to create at least 60,000 additional jobs in fresh fruit production and processing.
However, for Nigerians from different walks of life, reactions to the tomato policy have been mixed.
Their reactions stem mostly from the fact that the Federal Ministry of Agriculture and Rural Development, Nigeria’s domestic demand for tomato is 2.3 million tonnes annually while only 1.8 million tonnes is produced.
The 500,000 tons shortfall is made up of imported tomato paste, powder and concentrate.
Therefore, some Nigerians appear cynical about the success of the tomato policy.
Such scepticism also finds expression in the failure of such past government policies.
A trader who sells consumer goods at the Wuse Market in Abuja, Mrs. Gladys Amadi told THISDAY that the recent ban on the importation of rice and frozen chicken with the aim of reviving local rice snd poultry only ended up shooting the prices of the products to the rooftops.
She wondered whether a similar scenario will not be reenacted with the tomato policy.
A recent research conducted by the Department of Agricultural Economics Department, University of Ibadan indicated that tomato constitutes 18 per cent of all vegetables consumed by Nigeria’s estimated 180 million people.
That being the case, some Nigerians also question whether the new policy, though commendable, will meet local demand.
Some others believe it would create scarcity of tomatoes in the market and lead to price hike.
However, the National Union of Food, Beverage and Tobacco Employees (NUBTE) argued that local tomato companies should be given the latitude to plan for backward integration.
NUBTE argued that the quantity of fresh tomato being cultivated currently in the country is not enough for local consumption, noting however that the quality is not good enough to be processed into paste.
According to the union’s Presudent, Lateef Oyelekan, “it would take years for the planting, harvesting and processing of the produce into concentrate.”
But the President/Chief Executive Officer of Erisco Foods Limited, Mr. Eric Umeofia, whose company manufactures Ric-Giko tomato paste, disagrees, arguing that Nigeria has the capacity to grow and produce enough tomato paste for local consumption as well as for export.
He applauded the federal government’s policy, saying it would boost the manufacturing, farming and the entire tomato value chain.
Umeofia added that it would in turn catapult Nigeria from a tomato importer to a major exporter.
The increase in tariff on importation of tomato concentrate from five to 50 per cent and a levy of $1,500 per metric tonnes from May 7, he added, would encourage the sector to become an exporter in the next 18 months.
“It is not that this ban would give us more money personally, but on a wider scale, it is going to liberate our economy and make our farmers to be richer and a general progress for this country.
“And in the next 18 months, Nigeria would see the effects of this policy because farmers would be more buoyant, the industry would grow and we would become exporters of tomato paste and concentrate,” Umeofia said.
