The chairman, Harvest Feeds Agro Processing, Goke Adeyemi, speaks on the expectations of agro processors from the incoming administration. He highlights some of the challenges of agro processing in Nigeria and proffer solutions. COLLINS NNABUIFE brings excerpts:
What are your expectations for 2023?
2023 is an important year for Nigeria and for all investors and entrepreneurs, especially agro-preneurs . it is an election year, there will be a new government by May this year. We expect that there must be continuity in respect to government policies in agriculture. We need improvement, no doubt about that but we need consistency, all the efforts of the present administration in improving agriculture, Improving local sources for raw materials and research in agriculture must continue.
As a cassava starch processors, we are expecting that the government will have to focus on yield of our farmers, our farmers yield is still low, so improved agro-practices, improved varieties of cassava stems, improved support in respect to mechanization and other activities that will help to improve the yield.
The yield of cassava farmers is around 15 tons per hectare which is very low. The cost of production of start or any other product from cassava will always be high, but if the yield increases to 35 tons per hectare, then our cost of production will be manageable and there will be some profits for the processors and farmers as well.
In 2022, there were too many challenges with power supply. Despite a lot of efforts the government said they are putting in power, we are not feeling the impact as much. There are too many failures of the national grid, just recently, there was another national grid collapse that there was no power supply to our factory for almost 36 hours, within those times we had to run on diesel.
Diesel prices also went up to almost 200 per cent in the last 4 months. We are expecting that the government will put a lot of energy into generating electricity for industrial use. We know what is happening the world in respect to inflation, but in Nigeria it is rather very high. In the last 4 months, there has been a lot of stock unsold for starch processors, I have over 1000 tons of starch unsold, our customers are not picking up products, unfortunately some of these customers still import starch to Nigeria. Why are they importing starch while the local processors have unsold starch?
Go to many of the paper factories, candy factories, many of them import starch to Nigeria from Asia, meanwhile we have high quality starch in Nigeria that they can use, they are doing disservice to the economy of this country, but keep blaming the government, but what about the civil servants, those are the ministry, ports, customs, these products passes through the borders of Nigeria. We want the government to be consistent about policies which they said are encouraging local entrepreneurs, they should make sure that the policies are geared towards making them productive, I cannot be having over 1000 tons of starch in the store without selling.
The issue of economic integration in West Africa should be taken seriously, as we are growing the Nigerian economy; we also need to start exporting our products to nearby countries, Chad, Nigeria, Benin Republic and others. There should be some policies encouraging local producers that are ready and willing to export their products to be able to get them out.
I want to say that the export promotion council need to do a lot, they need to reach out, and when we go to their offices across the country they should give us soft landing on how we can export our very good quality products to neighbouring countries or any other place we want to export it to, this will also be part of the things that will make Nigeria generate foreign exchange.
In the 2023, we are expecting that the economy will be better, there will be more stability in policies of the government and improvement in what the present government have done, some new initiatives should come in without causing distortions to the existing dynamics in the sector
What do you suggest for the government to do to improve power supply for agro processing?
There is something the present Minister for Works and Housing, Babatunde Fashola mentioned in the recent past that there is off-grid generation of power. We need to do that a lot for agro processing zones in Nigeria. Set up off-grid power supply for those agro processing zones and we have several of the agro processing zones in Nigeria. The government needs to support those agro processing zones with off-grid power generation that will make us not dependent on the national grid.
The government can support processors in the area of solar energy, most of the agro processing industries are not heavy in terms of energy requirement, some of them are below 1 megawatt or 1.5 megawatt, so government can support them in terms of solar power that will support their business because it will be cheaper, it is also green and it will be off national grid.
There is also the biomass, when you talk about agro processing, there are a lot of biomass and waste generation, so the government can support them to use those biomass or wastes to generate electricity, and they are not very expensive, all we need is the will and the determination to do it.
What do you think the government can do to encourage local processors to compete with importers?
There are two things that we have been asking them to do, we requested that they should increase the import duty of starch into Nigeria. About 5 years ago it was about 10 per cent, we advised the government to increase it to 30 per cent because by increasing the import duty on starch, the price will go up, and when that happens, it will dissuade importation, we are not requesting for outright ban, but there is nothing wrong in banning, if you ban to increase the local production your own people, there is nothing wrong with that, so we need protection from government to protect our investment, we have invested over N6 billion into this industry, we cannot afford not to make reasonable revenue from our investment. Right now I am employing close to 400 workers in my factory, every month I pay close to N25 million salaries, all these things are the things that help the economy.
We know that sometime ago the Central Bank of Nigeria came up with the idea on how to stimulate agro processing in the country, we commend them for that, we are also asking for more, we are asking for a soft single digit interest loan. Because of the crisis in the world, the interest rates were increased, we want them to still look at it as a special intervention, so that the interest regime in our industry can be pegged at a particular level for 5 to 10 years.
Are you planning to increase production this year?
I will definitely do that, Nigeria has a big market, not only Nigeria, Africa has a very big market, and Africans have not tapped into Africa, people tapping into African now are not Africans so we have seen opportunities for Africans to tap into Africa, and that is what I am trying to do. How do we leverage on the possibility of expanding into Africa, into the Nigerian market, into the north, East, South-South and other countries, we are looking at expansion, we are looking at extension.
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