Producing tomato paste locally

More than 200,000 local farmers in Nigeria grow tomatoes but half of the produce rots on the farm due to poor road infrastructure. They are also wasted because the farmers do not have the requisite technology to either preserve these crops or turn them into other byproducts that would increase the value chain.

The gap between Nigeria’s farming potential and dismal performance began widening about 40 years ago, when the economic distortions caused by a booming oil industry started killing off agribusiness, transforming the country from one of the world’s leading food producers into one of its biggest importers.

The development has made the prospect of exploiting local production of tomato paste as fully Nigeria-based supply chain a daunting one so much so that private sector players – from Nigerian business magnates to multinationals – have become wary of the substantial investments that would be required to even attempt such a feat. Instead, multinationals such as Olam, the Singapore-based commodities trading house, bring in shipping containers of paste made from tomatoes grown in California and China, with only final stage processing done locally.

It is therefore heartening that despite the odds, Mira Mehta, a 31-year-old Harvard Business School graduate, has done her research and taken the plunge of launching her own start-up, Tomato Jos. The US entrepreneur, who previously worked on health projects in Nigeria for the Clinton Foundation, said she had begun thinking about possible farming projects after driving past what had looked like crimson carpets as farmers dried their unsold crop on the hot tarmac. It is also interesting that even though Mehta has yet to test-drive her supply chain, she may already have a ready market for her paste in Olam as Ram Mahadevan, Olam’s head of packaged foods is quoted as saying the company is ready to buy every kilogramme of tomato paste that Tomato Jos can produce.

For us, Mehta has taken a very bold step and we believe that like any other striving entrepreneur, she deserves all the encouragement and assistance from both the government and private organisations desirous of seeing Nigeria achieve greatness in agribusiness. And now that it has taken somebody from far away to appreciate problems of local farmers and the need to harness resources being wasted, President Muhammadu Buhari should see this as an opportunity to make good his administration’s determination to reduce poverty to its barest minimum and also generate employment.

It is now incumbent on the Central Bank of Nigeria (CBN) to also demonstrate its avowed commitment to developmental banking by ensuring that facilities are extended to Mehta and others like her at affordable rates to help them achieve their objectives of adding value to local raw materials and turning them into finished products rather than spending scarce foreign exchange on importation of finished products that can be manufactured locally. Equally, the Bank of Industry (BOI) should rise to the occasion by ensuring that Mehta is accommodated under the bank’s Micro Small Medium Enterprises Scheme (MSMES) for the single-digit loan facility programme.

Nigerians love tomatoes to the extent that the country has become the world’s largest importer of tomato paste, spending nearly $500 million annually on the thick red sauce. With fields full of tomatoes, though, why should the country continue to spend hard-earned forex importing tomato paste when it could be made locally? Now is the time to reverse the trend.