LDN - Business

Ghost tomato factory showcase for Nigeria's farming problems

[August 30, 2017] By Ulf Laessing

KANO, Nigeria (Reuters) - At a state-of-the-art plant in northern Nigeria, shiny machines stand next to a conveyor belt ready to crush tomatoes to satisfy the country's insatiable demand for tomato paste.

But a lonely cleaner mopping the floor is the only sign of activity in Nigeria's biggest tomato factory, equipped with the latest Italian and German technology. There aren't enough tomatoes to run it.

It's a powerful symbol of Nigeria's uphill challenge to build up agricultural production and end costly food imports to feed its 190 million people. The West African nation imports staples from milk to wheat to tomato paste, with funds it mainly earns from exporting oil.

The conglomerate of Africa's richest man, Aliko Dangote, launched the plant in March 2016, contracting Italian engineers working for months on a 350 euro-a-day allowances to set up the machines outside Kano, the main city in the north.

On paper this looked like a smart move as Nigeria imports up to 400,000 tons of tomato paste annually. The tinned paste is an ingredient in Nigerian tomato stew, used as the base for a host of traditional meat stews, sauces, soups and rice dishes that are staples of Nigerian cooking.

Dangote Group had thought of every technical detail, even setting up a control room linking its engineers to experts in Italy in case there was a problem.

But it underestimated the difficulties involved in getting tomatoes, despite signing deals with some 5,000 farmers guaranteeing them to pay more than the market price.

Lacking fertilizers and working with their bare hands, the farmers have been unable to produce the quality and quantity the plant needs to make paste. Much of the last season's output was wiped out by a pest.

The plant has been so far unable to find other supplies despite Nigeria producing some 1.5 million tons of tomatoes annually. A lack of good roads due to decades of corruption means tomatoes would perish on the way. Half of the country's output gets wasted.

Bar a few weeks, the plant has been standing idle, said its frustrated manager said A.L. Kaito, the managing director of Dangote Farms in charge of the plant.

"We are trying to weather out the storm, the cost is horrendous," said Kaito. "It's a nightmare."

Dangote spent some 4 billion naira ($12.74 million) on the plant and now plans to set up its own tomato cultivation scheme for around ten billion naira to cover up to 70 percent of its needs, buying land and tractors. Experts from Israel, Mexico and Spain will be flown in.

PROBLEMS

The tomato plant hopes to restart work in January at just half of its capacity of 1,200 tons a day after the next season, in the meantime costing 5 million naira every month.

Dangote has kept workers sitting at home on the payroll: the Italians spent months training them on the new machines.

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People walk past baskets of tomatoes in the Yankaba market in Kano, northwest Nigeria August 23, 2017. REUTERS/Akintunde Akinleye

The investment is paltry for its owner, who is spending billions of dollars on cement plants, sugar and rice schemes across Africa. His cement business alone posted revenues worth in 615 billion naira in 2016.

But for President Muhammadu Buhari the idle plant is a major setback after another tomato factory in Lagos threw in the towel in November 2016, unable to import tomatoes due to a lack of hard currency as Nigeria struggles with recession.

Buhari had, since his election in 2015, made it a priority to end dependency on food under the motto: "We must produce what we eat."

To encourage agriculture investments like the Dangote plant, the government has waived duties for greenhouse and processing equipment.

It is also giving subsidies to rice farmers and is considering expanding the scheme to tomato growers, a senior official in the federal ministry of agriculture said.

Officials had hoped to create jobs in agriculture to fight poverty in the north where some unemployed young men have joined an eight-year insurgency by Boko Haram jihadists.

But experts and farmers say, after decades of corruption holding back road and electricity projects and an obsession with producing oil, it will take time to improve the tomato output.

Low quality seed and a lack of power for pumping water means tomatoes can be grown only during the dry season, which creates a glut in March.

Farmers then lay out their tomatoes alongside highways hoping motorists will buy them. Anything that does not get sold within 24 hours is usually wasted due to a lack of cold storage.

They also ship some to Lagos, the southern megacity 1,000 km (600 miles) south of the factory. A basket of tomatoes sells for 2,000 naira in Lagos, but only around 10 percent of that ends up in farmers' pockets as traders and truckers take their cut.

"We don't have fertilizers and there is no power for cold rooms," said Sani Yadakwari, chairman of the some 10,000 tomato farmers in Kano state. "We need subsidies for our production."

Dangote has been supplying farmers with a Dutch seed which is expected to gradually boost the yield to 50 tons of tomatoes a hectare from 10 to 15 tons now, said Kaito.

But Adamu Sani, an agronomist working for the World Bank, was skeptical production would rise soon as farmers needed to get trained to use the new seeds which had not been tested yet on a large scale in Nigeria.

Dangote calls the plant the biggest in Africa. But the size might be a disadvantage: "The minimum capacity of the Dangote plant is too high for the little volumes you can get from farmers," Sani said.

(Editing by Peter Graff)

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