Forex restriction on starch: Processor hails CBN, calls for ban on importation

Following the recent forex restriction on the importation of starch, ethanol, syrup and other raw materials from cassava by the Central Bank of Nigeria (CBN), a starch processor, Goke Adeyemi has called on the government to completely ban starch importation in order to encourage local processors.

Just recently, the CBN Governor, Godwin Emefiele announced forex restriction for the importation of Starch, syrup, ethanol and other raw materials from starch.

Emefiele described Nigeria as the world’s largest producer of cassava tubers with 53 million metric tonnes per annum.

He lamented, however, that the yield per hectare averaging 20 tonnes was very low compared to other jurisdictions.

According to the CBN governor, the country imports cassava derivatives with over $600m each year.

He said, “The cassava initiative of the bank is to improve productivity, stabilise prices and encourage local processing to generate employment.

“To improve the cassava seed productivity, the bank is collaborating with the International Institute for Tropical Agriculture on the production and supply of cassava cultivars that can increase yield up to 40 tonnes.

“Arrangements are underway to support 51,388 farmers to produce 830,820 metric tonnes of cassava tubers for some identified processors.

“The country imports cassava derivatives of over $600m per year and we have also begun to restrict foreign exchange to those who want to import cassava, starch, ethanol and all other derivatives into Nigeria.”

Meanwhile, Goke Adeyemi who is also the chairman, Harvest Feeds Agro-Processing, said the decision of the CBN was a welcome development, noting that in the long run, a total ban should be placed on starch importation.

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According to him “it is a very welcome development, I want to say kudos to the present administration for taking that decision. However, this is only step one, right now import restriction means that some to some extent, our own forex won’t be ceded to import starch in Nigeria, but if someone else has dollars outside Nigeria he can bring in starch.

“What the economy desire is a total ban on the importation, so that’s why I said it’s a first step because in the instance we are now, Nigeria is an import-dependent economy for now, and a lot of effort and action is needed by informed people so that rather than imported dependent, we become an export-oriented economy.”

Adeyemi further said, “for me, it is good that there is restriction on forex for importing start, however, I think we still deserve far more than that, we need to go to step two may be in couple months or one year and put a complete ban on starch importation in Nigeria.

“The second thing is that we also need to do a lot of work, whether you are in the organized private sector, you are an agro processor, you are in the financial regulatory body or even at government policymakers, we need to collaborate a lot, to turn Nigeria economy from import-dependent to export-oriented.”

When Tribune Online asked if local processors could satisfy domestic demand if starch is completely banned, Adeyemi said he has increased his capacity by double and other local starch processors are springing up.

“As I speak now, I have doubled my own capacity, we are installing a fresh cassava starch factory which is to produce 50 ton of starch daily, and there are other several cassava starch processing factories that are springing up all over Nigeria.

“It is a gradual process, that’s why I said that we can use the first one year of this import restriction to see how the organized private sector and investors respond quickly to the local demand, then by 2020 you put a complete ban so that we can turn around the fortune agro-processing,” he added.