Nigeria is missing out of the $360 million tomato paste market as Dangote farms suffer setback again

Alhaji Aliko Dangote, Africa's richest man and owner of Dangote Farms Limited
  • Dangote Farms shuts down operations as it was unable to get the required feed stock from farmers, who switched to other crops.
  • The company expects the Nigerian government to enforce restriction policy on tomato paste importation into the country.
  • Tomato paste importation industry worth $360 million annually - PwC

Dangote Farms, a tomato processing plant, owned by Africa's richest man, Aliko Dangote, has shut down operations, due to lack of materials as farmers picked other crops during the rainy season.

According to a report by Bloomberg News, Abdulkareem Kaita, Managing Director of Dangote Farms, said the company lost at least N30 million monthly as workers have nothing to do on-site.

Located in Kadawa, outskirts of the northern city of Kano, Nigeria’s biggest tomato plant was launched in March 2016 and faced lack of materials and price dispute between the company and farmers late 2017 which saw its shutdown.

In March this year, the Tomato Processing plant was revived in a move to cut paste importation from China and make Africa's populous nation sufficient in local tomato production.

But this dream was cut short due to lack of credit facilities for farmers to increase supply.

Kaita said the company expects the government to enforce restriction policy on tomato paste importation into the country to improve local processing.

With this, the output of the farmers would tremendously improve and the processing factory would record ample supply,” Bloomberg quoted him as saying.

He said the implementation of the restriction policy will guarantee more investment in the tomato value chain.

PwC: Tomato paste importation costs Nigeria $360 million annually 

According to a 2018 PwC report, about 45% of fresh tomatoes produced was lost to poor supply chain management in 2017. 

Between that period, tomato paste importation into the country accounted for $360m annually.

Nigeria's tomato policy not yet effective

In 2017, the government announced a tomato policy to boost and increase domestic production and attract more investment. The policy, the government had said it will discourage importation by increasing tariffs on tomato concentrate from 5% to 50%.

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