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Nigeria’s largest cassava producer status increases investment opportunities

Nigeria’s largest cassava producer status increases investment opportunities

For several years down the line, Nigeria has been seeking ways to gain from its cassava production, a crop the country is the largest producer.

Africa’s biggest economy churns out 63 million metric tons of cassava tubers in 2021, according to data from the Food and Agricultural Organisation, which accounts for one-fifth of global production, a PwC report said.

This position puts Nigeria in a strong competitive advantage that can be tapped for an astounding economic impact. Achieving such a prospect is possible if quality issues and technological gaps undermining the value chain potential are addressed.

Efforts by successive governments and the private sector are thickening to ensure the local cassava value chain is developed and tapped for economic prosperity.

The biggest challenge confronting farmers is low yield per hectare. The yield per hectare for the tuber in the country has remained low, and opportunities across the cassava value chains are yet to be harnessed.

Read also: Agric ministry, Kwara trains cassava farmers on resilient practices

According to FAO, the country’s average farm yield of the tuber is seven metric tonnes (MT) compared to Ghana’s 22.5MT per hectare and Indonesia’s 26.6MT. Experts say that some of the limiting factors to increased productivity in cassava production are poor weed control and high cost of farm inputs.

Cassava leaves and roots are sources of valuable derivatives, including flour, food, ethanol (alcohol), animal feed, starch, a few biodegradable products, glucose syrup and sweeteners.

These products are also raw materials to numerous industrial items with limitless domestic and export market potentials.

If adequately harnessed, cassava can trigger an industrial revolution in Nigeria, empowering even rural dwellers who substantially farm the crop, according to the Nigeria Cassava Growers Association (NCGA).

It will also precipitate the establishment of various cassava-based industries, the association said.

It is imperative to explore the economic value of cassava products. The global market value of ethanol stood at $99.06 billion in 2022 and is expected to surpass $162.12 billion within the next decade.

Read also: Premium Cassava expands operation to meet demand

The market size of starch was $59.31 billion in 2022 and projected to hit the $87 billion mark before 2030. Also, cassava flour, which is said to be rich in fibre and protein, is gaining traction globally as its uses expand in the kitchen and pastry industry.

Considering the global valuation and profiles of cassava derivatives, if optimized for maximum productivity, Nigeria’s cassava value chain should be able to raise the GDP level by at least N10 trillion, generate millions of jobs for the economy and improve the country’s food security position, according to NCGA.

Although cassava is largely processed for food in Nigeria, it has been increasingly used throughout the world in textile, food, pharmaceutical, and biochemical industries.

A recent PwC report shows that the country has a supply- demand gap for high-quality cassava flour of about 485,000 MT and a gap for cassava starch of about 290,000MT.

Owing to these gaps, Nigeria industries have continued to import starch, flour and ethanol in large quantities that are by-products of cassava as they claim that not much local starch and flour meets their standards, saying that the market has failed to constantly supply high quality cassava starch and flour.

Read also: Producers target 600,000 cassava derivatives production in 5yrs

As a matter of fact, around 97 percent of the ethanol used locally is imported. This puts pressure on the country’s foreign exchange reserves, money that could have been saved if the country could tap into the opportunities in cassava production.

The Central Bank of Nigeria had in 2021 said the country’s cassava-by-products import value stood in the region of $580 million.

More importantly, initiatives targeting the use of cassava flour as a composite of wheat flour have seen several setbacks. The government mandated wheat millers to substitute five percent of wheat flour for cassava flour as far back as 2022.

It was later raised to 10 percent. However, the millers were unable to access sufficient quality cassava domestically to process into standard flour that meets their customers’ purchase criteria.

Consequently, the policy drive has not materialized into tangible results as the same inhibitions that necessitated a shift to the importation of ethanol and starch, forced wheat millers to explore importation, for assurance of quality, suitability, and availability.

Read also: Biofortification: HarvestPlus drives production of Vitamin A cassava, maize

Other production bottlenecks in the forms of inadequate power supply and the dearth of machinery to process cassava crops into acceptable flour standards hindered the successful implementation of the cassava-substitute policy.

To replicate its success across other agricultural value chains, Olam Agri, a leading agribusiness player in the country has resolved to support the country in harnessing its cassava production potentials.

Leveraging its expertise in processing capabilities, global origination footprint and a deep understanding of market needs, the business continues to facilitate developments across the agriculture value chains.

Within its three-decade operation in the country, the agribusiness invested around N360 billion in raising efficiency across various value chains.

These robust value chain development efforts include investment in innovative projects, key growth partnerships, farmers’ training, acquisition and optimization of major food production facilities, and expansion of operating infrastructure.

For example, to improve the supply of rice, a national staple food, the business entered a partnership with the International Fund for Agricultural Development (IFAD) and the federal government of Nigeria on the Value Chain Development Programme (VCDP). The partnership collaboration helped train smallholder rice farmers, and supply input to the farmers.

Read also: Processors call for revisit of cassava flour policy to reduce bread prices

As a result of that partnership, investment efforts data provided by IFAD revealed that a larger number of the smallholder rice farmers who were engaged by the business and its partners recorded a 79 percent jump in their incomes. The agribusiness’ rice value chain intervention is one of the factors that have spurred the increased supply of rice to the local market.

In the fish farming value chain, the agribusiness has been able to train over 7,500 fish farmers to improve the supply of fish protein and reduce the massive spend on importing the same.

To further help the farmers, the business launched a state-of-the-art feed mill, equipped with world-class tech such as vacuum cutting technology to provide highly quality, affordable, and accessible fish feed to local fishponds.
It currently moves over 1 million metric tons of raw materials and animal feed across Nigeria to ensure the availability of feed to fish farmers.

The firm plans to build an ultra-modern soybean crushing and processing plant in Nasarawa State. The plant will operate on an initial capacity of about 50, 000 metric tonnes. The capacity will be scaled up over three years to 300, 000 metric tonnes.

In view of the strategic location of the proposed facility, the investment will stimulate strong economic activities that will positively impact the animal feed segment and the livelihood of more than 300, 000 smallholder farmers from whom the agribusiness will source soybeans locally. It will also create direct and indirect jobs for the teeming population.

Read also: Cassava shortage hits processors in Rivers, worsened by exporting without value-addition

It is those impressive investment credentials that Olam Agri in Nigeria is looking to bring into developing the Cassava value chain. It has commissioned expert research into the Cassava industry to provide valuable insights that would help and inform its investment intervention drive.

Speaking about the cassava value chain development plan, Ashish Pande, country head of Olam Agri in Nigeria, said, “We are committed to the prosperity of Nigeria.”

“Our investment strategy is centred around helping the government drive and achieve its agriculture and economic development agenda. The development of the cassava value chain forms one of our core investment foci,” he said.

“The value chain has the potential to generate about 50 million jobs for the economy and contribute around N1 trillion to the GDP according to experts.”

“As part of our Seeds for the Future Foundation pillars, which include providing support for farmers and farming communities, enabling broader education & skill development for young people, empowering women (farmers & bakers), promoting health & nutrition, and reducing carbon emissions in business operations, we have commissioned expert research into the cassava value chain to provide an accurate lead for our investment thrust in that sector,” he added.

With Olam Agri in Nigeria bringing its wealth of experience into the cassava value chain, it is easy to imagine a brighter future for operators in the chain. The federal government can also count on a formidable and proven development partner that aligns with its economic growth aspirations to create more jobs, shore up food security, and increase Nigeria’s gross domestic product (GDP), amongst others.

Read also: IFAD to spend US$10m on 9,000 women, youths to enhance rice, Cassava production in Nasarawa