Lack of policy stalls investment in Nigeria’s cold chain industry – experts

The inability of Africa’s biggest economy to have an effective policy for its cold chain industry is deterring investments in the sector, experts have said.

The experts who spoke at the 3rd West Africa Cold Chain Summit and Exhibition (WACCSE) said that despite the potentials in Nigeria’s cold chain industry, investors will continue to shun investing in the sector owing to the lack of an existing policy.

According to them, an effective cold chain industry helps in promoting better food safety outcomes as fresh fruits, and vegetables are stored and transported at the right temperature to the markets.

They stated that the country’s cold chain industry is yet to thrive owing to the failure of the government to provide incentives for players and needed infrastructures for it to thrive.

“If there is no policy in place for the industry, investors will not be willing to invest,” said Oghenetega Iortim, chief executive, Gricd Integrated Services Limited at a panel discussion.

“There should be a policy in place as to ensure that food and drugs are stored in the right condition and temperature to ensure that the drugs are effective for their purposes and nutrients in food are preserved,” Iortim said.

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Africa’s most populous country has a cold storage capacity of less than a million cubic square meters, according to the 2018 Global Cold Storage Capacity (GCCA) Report.

According to experts in the industry, the country should have at least 20 million cubic square meters owing to its large population size, stressing that the lack of investment in the sector has slowed the industry growth.

“Investing in the infrastructure to make the industry thrive is the responsibility of the government,” said Andrew Fiati, account manager – East and West Africa, BASF Performance Materials.

“The more we have investments in the space, the more we can bridge the gaps in the cold value chains,” he said.

He urged the government to adopt the Indian model while enacting a deliberate policy to help the industry thrive.

He added that the country lacks active participation of development financial institutions in the space, unlike other markets where BASF operates.

Fiati stated that increasing investments in cold chain logistics will help in reducing the country’s huge post-harvest losses which is currently estimated at $9billion.

Post-harvest losses in Africa’s most populous nation have been estimated to range between 5 and 20 percent for grains; 20 percent for fish and as high as between 50 and 60 percent for tubers, fruits, and vegetables, according to experts.

The country loses $9billion (N3.7trillion) yearly to post-harvest losses, an indication that the country is largely dependent on external sources to augment local production, according to data from the National Bureau of Statistics.

And since the outbreak of the COVID-19 pandemic in the country, the situation has worsened. But this creates opportunities for investors from developing solutions that provide automated storage facilities to the manufacturing of plastic creates to cold chain logistics among others.

“Nigeria needs about 25,000 trucks to start scratching the surface but we currently have less than 2,000 trucks in the cold chain industry,” said Marie – Therese Phido, general manager – sales and marketing, Mandilas Group.

Speaking also, Akinsola Akeredolu-Ale, managing director and CEO, Lagos Commodities & Futures Exchange said that 90percent of the risks in the agricultural space is about perishable commodities.

“If we don’t handle post-harvest losses, we cannot stabilise agriculture in Nigeria,” he said. According to him, the funds to tap the opportunities in the industry are lacking.

He called on operators in the industry to collaborate to access funding through the exchange to drive growth in the industry.