FG May Impose Levies On Imported Starch To Drive Cassava Processing
The Federal Government may impose levies on imported starch, sweeteners, flour and ethanol soon in a bid to check food import bill and encourage investments in the processing of cassava, from which the products are obtained.Despite been the world largest producer of cassava, Nigeria still imports most of its industrial starch, a by-product of cassava, a trend the Federal Government hopes to reverse under an industrial cassava policy, which when implemented, would see the nation saving about $700 million or N252 billion (N360/$1) spent yearly on importing these products.
While the current processing capacity stands at about 35 per cent, industries dependent on the by-products from processed cassava may have no other option than to look inwards as government continues to explore measures to substitute importation by a way of imposing levies between zero to 60 per cent. For operators in the pharmaceutical, textiles, bakeries, beverages, distilleries among other food sector operators dependent on starch, sweeteners and ethanol, importation has remained a viable option due to cheaper prices and inability of local suppliers to meet their demands.
According to a memo obtained by The Guardian, Nigeria currently imports 96 per cent of starch as local demand of 600,000 tonnes could not be met, while 200,00 tonnes or 100 per cent of sweeteners used in the country are currently being imported. For high quality cassava flour (HQCF), 88 per cent of the 504,000 tonnes demanded locally is being imported.
By imposing levies on the imported products, the federal government hopes to improve local production of cassava starch to 1.4 million tonnes yearly by 2022 as well as increase investment in the sector.In his reaction, President, Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs called for caution in the execution and implementation of policies.
“Whatever we can derive from the country, we should work towards it. We have plenty of cassava. However, if we begin to use cassava for industrial use, it might put pressure on the demand for cassava. Cassava is a staple food for us in this country and raw materials for other products.
“If government poses a levy on importation, I believe it is a step in the right direction. We need to encourage utilisation of our local resources to produce what we need. It is necessary to carry the stakeholders along so that they can know how to cushion effect on their businesses”, he added.
On his part, President of the Cassava Processors and Marketers Association, Ayo Olubori said it is a welcome development if the present administration is keen on implementing the policy.
According to him, the present policy direction was one of those positions that the association made during the tenure of President Olusegun Obasanjo on the need to discourage importation of products in which the nation has local capacity.
“It is a welcome development and we hope that it would be implemented and sustained. The fear of pressure on the domestic market was once raised over a decade ago. Then, we had the political will and that aided the increase in local production. Investors saw the seriousness in government and raised their stakes. It will complement local efforts to improve production”, he added.
In the wheat segment, Dangote Flour Mills Plc and other key stakeholders in the flour milling industry have donated 50 AMAR multi-crop threshers to wheat farmers in the country; a move they say was part of their commitment to achieve self sufficiency in wheat production.
The General Managing Director, Dangote Flour Mills Plc., Thabo Mabe, stated that with the threshers, the current output of wheat production would be doubled, therefore reducing the current 4.5million metric tonnes importation of wheat into the country.
The Managing Director Flour Mill Nigeria, Paul Gbededo, said the initiative would effectively accelerate the government’s drive at attaining internal sufficiency in wheat production while saving foreign exchange.
He said the Flour Millers Association of Nigeria (FMAN) had signed MoU with the wheat farmers in 2016 to purchase all available wheat grain produced in the country in line with standard parameters and prevailing market prices.