Olajide Olutuyi, Co-Founder/ CEO, Top-Olax Energy Limited

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Nigeria’s cassava reform needs revival 10 Jun 2021

In my last two columns, I discussed Nigeria’s low productivity in two cash crops that have export potentials: cocoa and palm oil. This column discusses another of such crops: cassava. Although a food crop in Nigeria, cassava has significant industrial and export potentials that can be harnessed.
I was first exposed to the commercial value of cassava in 1995. The experience with my dad culminated in his establishment of a cassava processing plant a year later, in Ondo State. Sadly, the man who commissioned the plant, a former military administrator of Ondo State, Col. Ahmed Usman, passed away in the week that I was putting this piece together. Equally unfortunate is that the plant is now moribund, a reflection of the state of the cassava industry in Nigeria today.

Some Portuguese traders introduced cassava to Africa from Brazil in the 16th century. The crop is considered as one of the largest sources of carbohydrates in many tropical regions of the world, after rice and maize. Cassava is a staple food for over 500 million people worldwide. It contains 60 per cent water, 38 per cent carbohydrate, and a negligible amount of fat. Cassava is one of the most drought resistant crops. It can grow in any type of soil, which is why it is referred to as “the Rambo of root crops.”

While sub-Saharan Africa produces more than 50 per cent of the world’s cassava, it consumes almost all the produce. The potential of the crop to generate income in local currency has been little developed; even far less developed is its prospects of generating foreign exchange revenue for the country. The limited post-harvest processing capacity for the crop in Nigeria, high cost of trade, and non-tariff barriers make our cassava lacklustre compared to its foreign competitors in the export market.

In 2019, the global cassava market was valued at about $164 billion. The biggest producers were Nigeria with 61 metric tonnes (mt), Thailand (32 mt), and the Democratic Republic of the Congo (32 mt). The rest of the countries producing the crop accounted for a combined 42 per cent share of global production. In the same year, the total area cultivated for cassava production worldwide rose to 26 million hectares, while the global average cassava yield dropped slightly to 12 tonnes per hectare.

According to the African Development Bank (AfDB), Nigeria was responsible for an estimated 20 per cent of global cassava production, valued at $16 billion. But the country earned only $1 million from exporting a tiny fraction of the output.

Few African countries, including Nigeria, have been able to achieve yield comparable to that of Thailand, the world’s leading cassava exporter. According to the Food and Agriculture organization of the United Nations (FAO), India produced an average of 29 tonnes of cassava per hectare between 1993 and 2013, while Nigeria struggled with just 7 tonnes per hectare in the latter year. However, experts say Nigeria can achieve 40 tonnes per hectare.

The Nigerian cassava industry has the potential to generate revenue of about $427.3 million from domestic value addition and derive additional income amounting to $2.98 billion from the exportation of cassava. Realising this immense potential, the government introduced several policies to help galvanise cassava production in the country. Between 2002 – 2007, the Presidential Initiatives on Cassava was a major factor contributing to the yield increase recorded during this period. The broad objectives of the initiative were to increase the amount of land dedicated for cassava, boost production, and encourage exports of processed cassava products.

This period also witnessed a surge in international demand for cassava with export of 40 metric tonnes of cassava chips to China from Nigeria. China also opened an export line for cassava flakes worth over N28 billion annually. This generated a lot of industry interest.    

In 2011, the federal government launched the Cassava Transformation Agenda. Under the programme, bakers were encouraged to add 10 per cent cassava more flour in baking their bread. The goal was to increase the demand for cassava flour while reducing the demand for wheat. Four years later, Olanrewaju Jaiyeola, the CEO of Honeywell Flour Mills, said the company has incorporated 2.5 per cent cassava flour into its bread and hoped to reach the policy target of 10 per cent over the following years. But the buzz that was generated by the policy has since fizzled out.

Recently, the government proposed the establishment of Staple Crop Processing Zones (SCPZs) in 15 agro-processing clusters around the country. The first of this zone in Alape, Kogi State, is focused on cassava. The project, valued at $314 million, is expected to produce 62,000 tonnes of starch, 5,000 tonnes of sweeteners, and 720,000 tonnes of cassava roots. This is a welcome development one hopes will fulfill its promise.

Maximizing our cassava potential could save the country N127 billion (circa $400 million) annually. The country spends N635 billion (circa $2 billion) on the importation of wheat annually, according to the former Minister of Agriculture, Audu Ogbeh.

According to research conducted by the Conservation Science and Practice journal, cassava can help in alleviating hunger, generating revenue and reducing soil erosion. Evidence suggests that the crop can also help revive degraded land and make it productive anew, thereby generating positive socioeconomic and environmental impacts.

Thailand produced 20 million tonnes of cassava tubers less than Nigeria in 2013 but exported $2.6 billion worth of dried cassava compared to Nigeria’s export earnings of about $2 million. The country accounted for about 76 per cent of global trade in cassava and 84 per cent of its cassava exports went to China. In this regard, Nigeria has a lot to learn from Thailand.

Thailand’s success is rooted in the support given to the industry by the government.  The Thai government contributed over $2 billion in cassava subsidies from 2000-2010 to enable the country’s cassava products remain competitive in the global market. It is noteworthy to point out that the country first began investing in cassava processing in the mid-1990s with support from Japanese corporations. For the cassava industry to succeed in any country, there must be a strong and demonstrated support from the government. Many countries have also begun significant research to evaluate the use of cassava as ethanol in producing biofuel.

The Nigerian government will need to do more to ensure that the country starts to maximize its potential in the cassava industry. The support the Central Bank of Nigeria (CBN) is providing the industry is, therefore, a welcome development.

Olajide Olutuyi, a Financial Nigeria Columnist, holds a degree in Management from the University of Lethbridge, Canada; an MBA from the Australian Institute of Business; and a certificate in Social Impact Leadership from University of California, Berkeley, Haas School of Business. He is the Co-Founder/CEO Top-Olax Energy Limited and Executive Director, Samuel Olutuyi Foundation. Email: Olajide @theolutuyifoundation.org. Twitter: @jideolutuyi