Froex restriction for concentrate tomato paste frustrated industry in 2017–Survey
Though few companies manufacturing Tomato Paste in Nigeria were able to survive production since the introduction of the Central Bank of Nigeria (CBN) forex policy that restricted official access to dollars in purchase of triple concentrate tomato paste, investigations showed that some could not continue and either left the country or shut down.
The implications include the stifling the N19b Tomato Paste Industry in 2017, according to the Union of Tomato Paste Manufacturers in Nigeria (UTPMN).
The indigenous operators claimed that the CBN reluctance to amend its forex policy has boosted the importation of tomato paste into the country at the peril of local manufacturers.
Key example of losers in the policy include Erisco Foods Limited, a former local tomato paste manufacturer in Nigeria, who shut down operations in the country, citing similar conditions and relocated to China in other to begin import from China.
UTPMN within the year, further lamented that the ban on triple concentrate tomato paste used as raw material by local manufacturers has left the local industry in a dilapidating condition.
In a statement issued by the group and signed by its spokesman and Managing Director of Sonia Foods Industries Limited, Mr. Nnamdi Nnodebe earlier in the year, the union decried that a total investment in the packing manufacturing sector of tomato paste is about N19 billion.
According to him, “The economy cannot afford to lose such a huge industry that provides millions of direct and indirect jobs for Nigerians. The fact is this industry that grew to be the 13th largest in the world and second largest in Africa might die before the second quarter of next year if the ban on Forex is not lifted.”
Nnodebe further said the unavailability of tomato paste triple concentrate for the industry will grind production to a halt; meaning millions of people who depend on the industry for their livelihood will lose their jobs or have reduced income.
“The impact of this on the economy will be massive and negative as consumer behaviour will also be influenced leading to low purchase of goods in all sectors, not just tomato.”
“It makes better economics to import the raw materials that will enable production, grow the economy and keep jobs rather than importing the finished products or frustrating efforts to get the raw materials, thereby rendering millions jobless which might further kill the economy.
“The local packing industry can also form the hub for exports to the hinterland countries as there are adequate local capacities to more than cater to the domestic requirement. Using the ECOWAS benefits, this can be a huge foreign exchange earner for the country today and in the near future.
“Through the growth of the tomato industry Nigeria can compete with China instead of buying the finished goods from them,” he said.
“It is important for the government to recognize that the packing industry is an essential component of the tomato paste value chain and without this sector there can be no link between the farmer and the final consumer,” Nnodebe added.
More than 10 months into the policy, whereas the CBN claimed that the policy has reduced import bill of the country substantially, Tomato manufacturers seemed to be licking their wounds inflicted by the policy.
