Erisco Foods’ exit: Why Buhari must speak up


By Greg Odogwu

For a government that promised to create millions of jobs for the teeming unemployed youths, it is baffling, and very sad, that President Muhammadu Buhari’s administration has kept mum over the imminent closure of the tomato paste manufacturing factory run by a Nigerian businessman, Chief Eric Umeofia.

The factory has a plant capable of producing 450,000 metric tonnes of tomato paste and ketchup annually but the company is producing at below 20 per cent of its installed capacity, due to sundry challenges. Umeofia had recently announced that he was sacking 1,500 workers, and relocating his key manufacturing plant to China, following what he described as policy inconsistencies now crippling his Nigerian operations.

He said undue favouritism to Lebanese, Indian and Chinese businessmen in the allocation of foreign exchange to import tomato pastes and other items, including frozen fish, has dealt a serious blow to his company, Erisco Foods Ltd, and also to other Nigerian companies involved in manufacturing.

Because the tomato paste maker has been very visible in the media space, few Nigerians can claim ignorance of his damning allegations. And interestingly, there had been no official denial of his accusations. Nobody has come up to say that the man was only making wild allegations. So, if there is truth in what Umeofia is saying is happening to his business and the business of other indigenous manufacturers, it goes to show how clueless the present administration is in tackling our economic downturn.

Any government that is worth its name has one major policy thrust in a time of recession: Safeguard jobs; create more jobs. At all cost. For instance, after the recession that hit the world in 2008, the American economy would have been crippled had the government neglected its indigenous manufacturing industries. In order to prevent job losses and further slide down the recession lane, the Obama administration gave bailouts to major job-creating companies like the auto-making industry.

In fact, the bailouts were seemingly outrageously huge that the government was viciously panned by some critics. Michael Mann, the famous filmmaker, captured this in his documentary, “Democracy: A love story”. Nevertheless, the government achieved its objective of keeping jobs, creating more jobs, and inspiring more entrepreneurial innovations.

I can understand why Umeofia lamented about inconsistency in government policies. The Buhari government has always mouthed the “change” mantra, and maintained its stance on self-sustainability in food production. Indeed, the Erisco boss was among the delegation that accompanied President Buhari to China the other time. However, it has always been said that we are not lacking in good policies; where we are always found wanting is in implementation.

Therefore, the government says one thing and does another. It says it will support local manufacturers and food processors to curtail the importation mania that had held the country in a stranglehold. But then it refuses to actually support the existing local manufacturers by giving them incentives, rebates, and forex, so as to make their business competitive.

There is also shallowness to the agricultural policy thrust of the present administration.  The government keeps saying that Nigerian youths should embrace agriculture as means of job creation and food production for the teeming population. Yet, the government has not recognised that modern agriculture does not end in the farms and barns, but in processing plants and sophisticated storage facilities. Without the secondary value added to farm produce, they are as good as wasted.

This is because whereas a country produces cocoa for instance, it could spend more money importing chocolates – end product of cocoa.

In the same vein, producing thousands of tonnes of tomato in our farms cannot really mean much when these vegetables could be lost overnight for lack of storage facility. What is more, to what extent is Nigeria self-sufficient in tomato production-consumption when Nigerian families still cannot do without augmenting the crop with the tomato paste version in their daily cooking?

This is where the Erisco tomato processing business comes in. I have yet to understand why a company with a niche market, and which has demonstrated unquestionable patriotism, cannot be courted in order to bring more innovations on board our fledgling economy. If we can have a Dangote as a business concern that proudly flies the Nigerian flag, why can’t we have another torchbearer?

It was reported that Erisco Foods has had dominant presence in Liberia and Angola over the years, and is listed as Africa’s top tomato paste manufacturer, and the company is the fourth largest of its type in the world. Umeofia had reportedly said he brought his manufacturing concerns worth about $150m in Dubai and Angola to Nigeria in 2009 in what he described as his patriotic zeal to contribute to the growth of Nigeria.

The looming job losses should worry all of us. When Umeofia announced plans to shut down operations and sack some 1,500 workers at his factory in Oregun industrial layout, Lagos State, I expected the government to intervene. If the man was not patriotic, he would not have made his plans public.

The industrialist said that he decided to relocate to China to produce at cheaper cost, and then sell the goods in Nigeria and other African markets, stressing that he would even make more profit doing so. Of course, importation from foreign-based factories has been the bane of our economy, and is a deadly paradigm that the Buhari government should tackle. Even crude oil refineries, part-owned by Nigerians, have been in the same business for years worsening petroleum scarcity in the country.

I am convinced that a government that is serious about turning the tide would have used the Erisco as the poster boy of economic redirection. But the way it is, Buhari and his team are wasting this golden opportunity.

Some months ago, Nigerian lawmakers raised the alarm over the dumping of sub-standard tomato pastes in the country. Up till now, no concrete action has been taken to curb the menace or to bring the relevant regulatory agencies to account for the lapse. These fake tomato pastes are not only dangerous to the economy; they are dangerous to our health!

It is beyond imagination that some few corrupt government officials will sit in their offices and allow foreigners wreak havoc in Nigeria, and they do not raise a finger just because of their personal gain from the dastardly enterprise. The multiplier effect is also beyond imagination. The story does not end in Erisco Foods sacking thousands of Nigerian workers, it is the millions of workers that the company would have been employed were it allowed to expand.

Instructively, Umeofia proclaimed that Erisco Foods would also no longer go ahead with its plan to set up a plant to manufacture tractors and other agricultural accessories in northern Nigeria, due to foreign exchange challenges to purchase machinery.

The ball is now on the court of Mr President. He can allow yet another company to pack up and leave Nigeria, or he can raise his voice and turn the tide. But we must also remember that the problem is not in one company leaving Nigeria; it is in the hundreds of companies that would never rise again, because they see that the ones that wanted to rise were snuffed out like a candle in the wind.

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