BusinessDay

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

Manufacturers in Rivers State that use cassava as raw material for their production have decried the scarcity of cassava to feed their processing plants. The continuous exports of raw agricultural goods such as cassava, without value addition was described as one that denies industries the raw material stock to feed local manufacturing, and also making the exporters get less value for the unprocessed exported goods.

These were some of the highlights from the 38th annual general meeting (AGM) of the Rivers/Bayelsa chapter of the Manufacturers Association of Nigeria (MAN) in Port Harcourt.

Adawari Michael Pepple, a former senator, said at the event that raw materials were being lost to exportation instead of being made available as raw materials for local manufacturers, who can add value to them and create more wealth in the value chain.

“There is need to integrate local raw materials for processing. The raw materials ought to be processed before export. Exporting them is nothing short of 21st century exploitation,” he said.

According to him, farms were not meeting their processing capacity, saying as an instance, his factory needed cassava as raw materials and he set up a facility for it, but there has not been enough cassava to feed the factory, and calling on government to boost cassava production.

“Yes! There is enough to put food on the table though at expensive rates. Government must step in, now. The agric sector must be incentivized before all Nigeria’s factories shut down,” he said.

Read also: Lack of access to foreign exchange, insecurity crippling Nigeria’s economy, says MAN

He further said devoting even five per cent of the amount spent on petrol subsidy on manufacturing would boost production. He also said rail lines should link manufacturing and business hubs in the south-south and south-east such as Port Harcourt, Aba, Nnewi, and Onitsha.

“The issue of Eastern ports is another issue but at least the ports in Port Harcourt are doing better than seven years ago. We appeal to the FG to do more in this direction,” he said. “We urge state governments especially the Rivers State government to set up industrial parks and put all amenities and facilities there. Government should pipe gas there, put a turbine and power supply would be solved. Just put a good road to it, and harmonise taxes for them. This way, the companies will be back.”

He listed other challenges facing manufacturers, including the increasing difficulty to source foreign exchange for the importation of raw materials, machines and spare parts that are not available locally.

He reiterated the challenge of inadequate electricity supply and incessant increases in tariff without commensurate improvement in generation, transmission, and distribution.

He also said manufacturers still faced the problem of low patronage of locally manufactured products evident in the high number of unsold inventories which amounted to ₦224.63 billion in the 2nd half of 2021.

He also identified multiple taxes and over regulation by government agencies, which overburden manufacturers through taxes, levies, fees, permits etc. “Companies in the sector are confronted daily with multiple regulations and excessive drive for revenue generation by Government Agencies,” he said.

He also highlighted difficulty in access to funds as another teething problem. “Access to funds remains a major challenge for manufacturers as interest rate charges increased to 24 per cent in the 2nd half of 2021 from 22 per cent recorded in the corresponding half of 2020.”

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