The inability of the Bank of Industry (BoI) and the Federal Ministry of Agriculture and Rural Development (FMARD) to fully disburse the first tranche of the N10 billion cassava bread fund has led to the total collapse of Nigeria’s cassava bread inclusion policy.
The policy had led many investors to put a lot of money into cassava farming and processing but these investments all went down the drain as the policy died, making the country’s entire cassava value chain to remain underdeveloped.
Also, the sudden stoppage of the cassava flour policy and the lack of information about the remaining funds in the coffers of BoI and FMARD have given players in the industry the impression that Nigeria is not serious with achieving cassava inclusion in flour.
“Only 35 of our members were able to access the fund partially from BoI and some of the processing machines given where not functional. The intervention was also supposed to provide a window for processors to access running cost which none of us have been able to access,” Ayo Olubori, chairman, National Cassava Processors and Marketers Association (NCAPMA) said in a telephone interview.
“We have written six times to BoI without them replying. Also N450 million was released to FMARD to stabilise the market in terms of pricing because the flour millers off taking price was lower than our own offering price. So the N450 million was to take care of the price differentials but this has not happened.
“This is major reasons why the cassava bread policy failed. Currently, we have no record to the effect, that any flour miller in the country is adding even one percent of HQCF to its production of flour,” said Olubori.
In 2014, the Goodluck Jonathans led-government enacted a Cassava Bread Fund where 15 percent levy on imported wheat was to accrue to an account managed by the Ministry of Finance and the Nigerian Custom Service. A first tranche of N10 billion was released then for the development of entire cassava value chain.
Out of this amount some N4.3 billion was domiciled with BoI, to support SMEs involved in cassava processing and N2.4 billion with Bank of Agriculture (BoA) to boost primary production, while the rest was domiciled with FMARD.
But these money’s were partially disbursed initially with the remaining domiciled at the bank and the country’s agric ministry.
Over 200 cassava processors with small and medium sizes machines have shut down their operations owing to their inability to find market for their High Quality Cassava Flour (HQCF), industry sources tell BusinessDay.
Similarly, farmers’ huge investments made in increasing production of the crop yielded no result as processors failed to off-take from farmers.
“The entire N2.4 billion with BoA was disbursed to farmers to farm 10,500 hectares which we cultivated but when we harvested there were no off takers because the processors who would take the cassava did not get money from BoI so they could not upgrade their machines. The agreement was that we sell to only the processors,” Segun Adewumi, president, Nigeria Cassava Growers Association (NCGA) told BusinessDay.
“As a result, we lost our entire investments and many of us cannot repay the loan we collected from BoA then. The 15 percent import levy on wheat would have accumulated to about N600 billion now which is meant to develop the cassava value chain. At that time a total of N650 billion was spent on the importation of wheat into the country annually,” Adewumi said.
Data available from National Bureau of Statistics (NBS) shows that Nigeria has spent a total of N193 billion on the importation of wheat from United States, Russia, Australia, amongst others from January to September 2017.
After several calls, text message and a visit to BoI, the bank declined response to BusinessDay’s questions on the issue. Also, efforts to reach FMARD to comment on the issue did not yielded any result.
Jude Okafor, publicity secretary, Association of Masters Bakers and Caterers of Nigeria said that the loan made available to bakers in the country was in form of equipment and training which is yet to be carried out by BoI since the initial tranche was given to the bank by the government.
“35,000 bakers were supposed to be trained and equipped but the fund to do this has been domiciled with BoI and this is part of the reasons why the country’s cassava project is still in limbo with collapse of the initiative entirely,” Okafor said.
“Right now there is no flour miller including high quality cassava flour in their flour production in the country. We need to take a holistic view to address the issue as this has continued to affect the prices of bread in the country,” he said.
Josephine Okojie
