Saturday, 19 May 2018

Forex Policy N19b Tomato Paste Industry May Go Extinct In 2017 – Union


By Chioma Umeha
There are fears that the Nigeria’s N19 billion tomato paste manufacturing industry may collapse in the second quarter of 2017, if President Muhammadu Buhari continues to back the harsh forex policy of the Central Bank of Nigeria (CBN).
Giving the warning over the imminent collapse of   the industry were the value-chain operators in the tomato paste business.
The operators under the auspices of Union of Tomato Paste Manufacturers in Nigeria stressed that the once vibrant tomato industry might go extinct in 2017 if the CBN does not amend its policy on forex to exclude triple concentrate tomato paste from the scope of the 41 items under the restricted list.
The 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.
It will be recalled that Erisco Foods Limited, a former local tomato paste manufacturer in Nigeria, had shut down operations in the country, citing similar conditions.
Nigeria’s Union of Tomato Paste Manufacturers 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.
The union views were contained in a press statement signed by the union’s spokesman, Mr. Nnamdi Nnodebe.
Nnodebe who is also the Managing Director of Sonia Foods Industries Limited, one of the stakeholders in the production of tomato paste variants, confirmed that the total investment in the packing manufacturing sector of tomato paste is about N19 billion.
He lamented: “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.
His words: “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.” 
He also reasoned that the tomato industry workers also patronise electronics shops, banks, petrol stations, they pay taxes among others, but they will no longer be able to fulfill all these.
The Managing Director of Sonia Foods Industries Limited said: “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.


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