New to site?


Lost password? (X)

Already have an account?



Dangote shuts tomato paste plant over dollar scarcity – Punch

HomeNewsDangote shuts tomato paste plant over dollar scarcity – Punch
Dangote shuts tomato paste plant over dollar scarcity – Punch
  • Author
  • Comments
  • Category

Stanley Opara with agency report

Africa’s richest man, Aliko Dangote, has shut his new tomato paste plant in Kano due to a shortage of dollars needed to import raw materials, a senior executive has said.

This is the second of such closures in months, in a blow to the Federal Government’s drive to diversify the economy.

President Muhammadu Buhari frequently speaks of ending Nigeria’s dependency on oil exports by boosting food production, repeating his mantra: “We must produce what we eat.”

But the country is mired in recession and struggling with dollar shortages due to low oil prices.

Entrepreneurs say the crisis has been worsened by the central bank’s decision to keep an artificially high exchange rate, which has dried up dollar supplies, forcing firms to buy them on the black market at a 40 per cent premium.

“Where the foreign exchange is not available, we are cutting down our operations. For example, we had a tomato-based processing plant, we have shut it down,” Devakumar Edwin, a senior executive with Dangote’s business, told Reuters in an interview.

Tomato paste is a staple food in Nigeria but the country imports much of its supplies from China.

Dangote’s plant opened only last year amid much talk from officials predicting a new era of Nigeria producing its own tomato paste, displacing costly imports.

The dollar scarcity has also forced Dangote to cut down on other food businesses such as flour milling, sugar refining and vegetable oil refining, Edwin said.

The tomato plant may reopen once the company is able to source raw tomatoes locally, he said.

In November, Erisco Food closed a tomato paste plant in Lagos, eight months after opening it, due to a shortage of hard currency needed to import raw materials. Some 1,500 staff members reportedly lost their jobs.

Erisco had hoped the government would support local producers by banning imports of tomato paste, as it had done in the past with cement or some fruits to help manufacturers.

The nation produces around 1.5 million tonnes of tomatoes a year but the bulk of them begins to rot before they get to the market due to poor roads and storage facilities.

Related Posts