In May 2017, the Federal Ministry of Industry, Trade and Investment, the Federal Ministry of Agriculture and Rural Development, and industry players introduced a tomato policy to increase local production, improve the value addition and attract more investments into the industry.
It was a good policy in general, but some aspects of it were simply ambitious. The policy started by raising tariff on tomato concentrate, a critical input, from 5 percent to 50 percent and introduced $1,500 levy per ton on imported concentrate. As of the time of increasing the tariff and levy on concentrate and imposing $1,500 per ton on its importation, Nigeria had no single manufacturer of concentrate. Dangote Tomato Processing Factory in Kano was only one year old and was yet to commence full operations. Luckily for Nigeria, Dangote Tomato came fully on board later, but not without problems from short tomato supply to breach of agreements by farmers.
Dangote Tomato, largest tomato processing factory in the country, has been the only concentrate maker, but the company has operated irregularly since then owing to inadequate supply of quality tomatoes for puree production, among other issues. The tomato plant has been under lock and key since May 2020 and will reopen in March 2021, yet importation of concentrate is almost impossible for the few remaining tomato players due to the levy, tariff and inability of tomato importers to get foreign exchange.
“We are currently not operating and we will commence production when tomato season starts in early February 2021,” Abdulkarim Kaita, managing director, Dangote Tomato Processing Factory, said.
“We produced our concentrates last in early May because we could not get enough quality tomatoes,” Kaita said.
“We have set up a greenhouse purposely to grow tomato seedlings suitable for puree and that is what we are distributing to farmers to get the right quality we need for processing of tomato paste,” he said.
He noted that sales of his factory concentrates have improved since the border closure and reduction in smuggling activities.
Industry sources told BusinessDay that when Dangote produced its concentrate, Sonia Foods, another tomato player, bought all of the products. Right now, only one of the players was given a licence to import concentrate by the Central Bank of Nigeria (CBN), a situation that is creating crisis in the sector.
The Human and Environmental Development Agenda (HEDA Resource Centre), a non-governmental organisation, wrote a petition in October 2020 to the Economic and Financial Crimes Commission (EFCC) to initiate a probe into the matter.
Read also: How policy inconsistencies hamper Nigeria’s industrial targets
Moreover, since the tomato policy took off, it has failed to strengthen the end-to-end linkages in the tomato value chain and increase processing, which was what the policy boasted to achieve. The post-harvest losses and wastages have not stopped. Though there have been increased activities from Olam, Tomato Jos and Sonia Foods, their activities have not improved prices for majorly poor population.
Around 82.9 million Nigerians are extremely poor, constituting 40.1 percent of the total population with real per capita expenditures below N137,430 in 2019, according to NBS’ Poverty and Inequality report in May 2020. The World Bank predicted that there would be 95.7 million Nigerians living below the poverty line by 2022.
Despite the tomato policy banning outright the importation of tomato paste into the country, BusinessDay survey across Lagos markets shows that local markets are still flooded with imported tomato paste. The question then is, where is the paste coming from?
“Well, when you make importation nearly impossible, the businessmen will find a way of bringing their products in,” one of the players in the industry said.
“Right now, you will not always find local products in the market because foreign tomato paste is everywhere. So tell me, is Nigeria winning or losing the tomato war?” the player, who pleaded anonymity, asked.
The policy has not improved market prices for cash-strapped Nigerian consumers whose incomes have gone south since 2017 when the policy was made. A sachet of tomato paste, which was sold for N40 prior to the policy, now sells for N130, indicating a 225 percent rise in price.
Similarly, a 100g of tomato paste, which was sold for N60 in 2017 before the policy was enacted, now sells for N150, showing a 150 percent rise in price, while 800g tinned tomato now sells for N1,000 as against N480 sold in 2017.
A big-sized tinned tomato (2,200g) now sells for average of N3,000 as against N1,320 sold prior to the policy in 2017. This shows a 127 percent increase in price.
“Foreign paste continues to dominate the markets for a few reasons. One reason is that the tomato importation policy was announced well before it was enacted, so many people and companies stockpiled inventory,” said Mira Mehta, founder and CEO, Tomato Jos.
“If the government can help local manufactures to succeed while also ensuring that consumer demand is met in the short term, it would be a win-win,” Mehta said.
Africa’s biggest economy produces 1.5 million tons of tomato per annum, with 0.7 million metric tons post-harvest loss. Tomato demand in Nigeria is put at 2.2 million metric tons per annum, leaving a gap of 700,000 metric tons, according to official data from the Ministry of Agriculture.
The country’s average yield per hectare has remained low at 5.5 tons per hectare compared with global average of 38 tons per hectare.
The country relies heavily on imports of tomato paste to meet the existing gap, thus making it the 13th largest importer of tomato paste globally.
According to a PWC report, Africa’s most populous nation is the largest consumer of vegetables in sub-Saharan Africa with about 22kg per capita, with tomato consumption put at 12kg per capita in 2016.
