A nine fold jump in tomato prices in Africa’s biggest economy is piling pressure on processors and forcing them to discontinue processing the fresh vegetable. Prices of tomato, a key cooking ingredient in Nigeria, have surged 847% to date due to the invasion of Tuta Absoluta in major producing states in May and the current rainy season.
Tuta Absoluta, commonly known as tomato leaf miner, is a devastating pest of tomato which originated from South America. It can breed between 10-12 generations a year and each female can lay up to 250-300 eggs in her life time. This pest very quickly crosses borders, devastating tomato production in both protected and open fields. The infestation of the pest is also reported on other solanaceous crops like potato, aubergine and common beans. The pest has spread from South America to several parts of Europe, entire Africa and has now spread to India. The Indian Council of Agricultural Research reports that, for the first time, the pest is infesting tomato crop in Maharashtra India. It has a potential to cause up to 90% loss of yield and fruit quality under greenhouse and field conditions. Plants are damaged in larval stages, directly feeding on leaves, stems, buds, calyces, young fruit, or ripe fruit and by the invasion of secondary pathogens which enter through the wounds made by the pest.
The situation has left Nigeria’s tomato paste and concentrate production industry at a standstill as the country’s largest processor and two other medium-sized factories have shut down, perpetuating the importation and smuggling of triple concentrate into Nigeria.
“When tomatoes are out of season like they are today, the prices skyrocket and factories cannot run profitably at these prices. We stop processing,” said a source in a top tomato processing factory that is not authorized to speak on the issue. “Instead of buying fresh fruits out of season, we make lots of tomato paste during the main season and then we convert it into the retail sachets over the subsequent months when it is out of season and prices are very high,” the source added.
Tomatoes in Nigeria are grown in the dry season – December to April. The rainy season, May to September, is not conducive for growing tomatoes, as rainwater destroys the tomato crop, according to experts. The surge in the prices of fresh fruits this year started much earlier in May after Tuta Absoluta invaded farms in major tomato-growing areas in the country. The price hike has now worsened as the country enters the rainy season and starts importing fresh fruits from neighbouring countries to fill the demand gap.
“As you can see, the Dangote Tomato Processing Company and its sister company the Dangote Agro Inputs Green House Project, are currently out of operations,” a worker at the factory who is not authorized to comment told our correspondent. According to him, the Dangote factory has been shut down since the off-season due to farmers’ failure to respect an agreement it entered with the processor to supply the fresh fruits at off-taker rates.
With the off-taker agreement, the firm provided improved seeds, chemicals and other inputs to farmers, to raise their yield per hectare, with an understanding that it would then get tomatoes at specified rates from the farmers, he said. The farmers, however, eventually sell their produce in the open market whenever prices are high and to the tomato factory only when prices are low, he added.
The price of a big basket of fresh tomatoes in Mile 12 Market, Lagos ranges from N90,000 to N100,000, depending on negotiation, as against N9,500 in January, according to a recent market survey. A medium size basket is sold for between N45, 000 and N50, 000 – an indication that prices have surged by over 847% in Lagos markets in six months.
In May 2017, the Federal Ministry of Industry, Trade and Investment, the Federal Ministry of Agriculture and Rural Development, as well as industry players introduced a tomato policy to increase local production, improve value addition and attract more investments into the industry. This prompted the government to impose a levy of $1,500 on a tonne of triple concentrate imported from China, the United States, and other parts of the world, including a 50% tariff, to protect the industry. But six years later, imported tomato pastes are still found across markets. The government is also reluctant to remove the 25% import duty policy for greenhouse equipment as contained in the policy paper. Also, the policy failed to strengthen the end-to-end linkages in the tomato value chain and increase processing, which was what the policy aimed to achieve.
The post-harvest losses and wastages have not stopped. However, there have been increased activities from Olam, Tomato Jos, GBFoods and Sonia Foods, with more investments coming into the sector.
Africa’s biggest economy produces 1.5 million tonnes of tomato per annum, with 0.7 million tonnes post-harvest loss. Tomato demand in Nigeria is put at 2.2 million tonnes per annum, leaving a gap of 700,000 tonnes, according to official data from the agricultural ministry. The country’s average yield per hectare has remained low at 4.2 million tonnes per hectare, compared with the global average of 38 million tonnes per hectare, according to data from the Food and Agricultural Organisation. The country relies heavily on imports of tomato paste to meet the existing gap, thus making it the 13th largest importer of tomato paste globally.
According to a PwC report, Africa’s most populous nation is the largest consumer of vegetables in Sub-Saharan Africa with about 22kg per capita, with tomato consumption put at 12kg per capita in 2016. “The tomato policy is yet to transform the country’s paste/puree industry. The policy needs to be re-evaluated to attain the desired impact,” African Farmer Mogaji, chief executive of X-ray Consulting, said.
The new administration in the country seems to have been too busy churning out policies and reforms, that it forgot to come up with measures for cushioning the effects of those policies which ought to have preceded the policies or run side-by-side with them.
Since the palliatives are still in the works and suffering is intensifying, Olumide Emmanuel, the CEO of Common Sense Group and a wealth creation coach, says time is now for individuals, households and organizations to adopt strategies that will enable them to survive the hash times. “What we are going through now cannot be worse than COVID-19 and if we could survive COVID, we will survive this one. What I advise now is that we should operate with COVID mindset, that even though we are moving around, we are all the same in another lockdown,” he said.
“When you are facing tough times, first, go back to basics,” he advised further, adding, “business owners should ask themselves questions such as why do we exist as a company and what are we here to do?” He said that time has come for businesses to be a lot more creative, advising that everybody should be able to identify where they could cut costs as, according to him, the only way to make money available was either to increase income or reduce expenditure. At individual and household level, the wealth creation coach said that people should realize that, in this part of the world, collaboration is the new competition, explaining that, “a lot of times, we try to do things at solo level and that has affected us a great deal. In the UK today, people have cars but they don’t go out with them. They engage in car-pooling. We should be thinking of major things that cost us money and find ways to reduce them.”
He listed shelter, feeding and transportation as individual or household basic problems, saying that looking at shelter, people should begin to think of how to live communally. He cited UK where three different people rent one room, share the kitchen, parlour and other amenities. “They may not have known one another anywhere before. Why do you need a two-bedroom apartment as a single man that is not ready to marry in the next two or three years? Is hotel not face-me, I face-you as everybody is in his own room?” he queried.
On feeding, he advised that instead of going to the supermarket to shop for things that are expensive, a few people should come together, pool money together and go to places like Mile 12 or Otto where foodstuff is sold at wholesale prices. They should buy, come back and share.
As for transportation, he wondered why one person would be driving and three or four spaces were empty in his car. “If we live in the same neighbourhood, we can come together and use one another’s cars on a weekly basis. That is car-pooling. We have to survive anyhow. The White man said, if you cannot fly, run; if you cannot run, walk, and if you cannot walk, crawl. Just make sure you are making progress. That is the way out. Everybody needs to tighten his belt,” he said. He said that at a time like this, everybody must learn how to create wealth, pointing out that the principle for wealth creation has not changed and will never change, even though the application of those principles is personal, contextual and geographical. “Saving is sacrosanct, but why do you save? You save to put money for your rest. One of the reasons you save is for eventuality, emergency and as a financial planning mechanism because everybody has to have six to eight months of their earnings saved up in cash,” he advised further.