10billion cassava bread fund will bring back moribund factories….. Salami

A prominent member of the Cassava Processor, Marketer Association of Nigeria (NCMAN) Pastor Seyi Salami has said the ten billion naira cassava bread fund of the Federal Government will resuscitate many dead processing and bread factories in Nigeria adding the implication of this is creation of more job at all the value chains of the produce. He added that all logistic to achieve this has been set in motion by the government with full involvement of his association. Read the excerpts of his interview below.

What are the present challenges of this Association?
Let me start by saying these challenges are already receiving government attention with proactive solution through the Mr. President Agricultural Transformation Agenda (ATA) under the auspices of the Minister for Agriculture and Rural Development, Dr. Akinwumi Adesina. But i will like to mention some of the challenges before now. The first is the problem of inefficient flash drier heat exchanger that is use to process HQCF as we need constant energy to power this. Over the years, we have been having challenges in this area which we have overcome as there are flash driers that can produce three –four tons daily. The other problem has to do with the pricing of cassava flour with inflation challenges as the HQCF have remained fixed without change since year 2006.

This price was fixed during Chief Obasanjo regime and it has remained like that since then. There is problem of inadequate working capital as most of our processors have lost lots of fund through policy somersault of the government. You set up a factory that when you produce the price is not in tandem with the cost of production. The major one that affected our members is the unwillingness of the off takers to take the process HQCF from us. The flour millers are not ready to take our products although this has been well taken care of by the new government policy.

Others have to do with infrastructure availability especially the energy, the road and the local government multiple taxes. But we are grateful to the present government engagement of our association with proactive effort to tackle all these challenges. Already a tax holiday of five years will be given to us for the stabilization of our business before we shall start paying corporate tax level. You will agree with me that there is cassava fund bread of 10 billion naira which is an initiative to provide fund to addressing all the aforementioned challenges and we are very positive that as a matter of couples, there is going to be a rapid production of HQCF which will implies the awakening of the mist of the factories that have closed down to come alive again. The Bank of Industry has been ordered to release the fund to stakeholders like processors and bread bakers.

The issue of bread fund, let us talk about its impact on your association?
Take for instance, a typical processing plant costs between 50-60 million naira. You can imagine if those plants are shut down and moribund. These are some of things we are talking but under this ATA, the government wants to see all these are running because cassava bread is a local content initiative and this fund is meant to address all these challenges. If you have a factory that is one time or the other challenged, this is the time for you to come forward because there is a fund for it. Because of the percentage inclusion of cassava, there is need to increase to high quality cassava production for bread as demand for it has increased and the volume of bread baked on daily basis is 100million loaves or there about. The economic impact is great on yearly basis as over 1 billion is used to import wheat daily.

If we can just reduce this with about 20-10% by way of cassava inclusion will mean about 200million naira being saved on daily basis which is now plough back into the economy through the use of local content of cassava.2.46 billion has been earmark for the primary production of high quality cassava tubers so as to make price competitive. If the cost of production of cassava tuber is cut down, this would make the processors to produce HQCF to bread makers at a very competitive price to checkmate wheat’s demand. 4.6 billion naira is meant for the producers, 3.4 billion for marketing, 2.2 for master bakers and 1.2 for the processors and it is revolving loan that will be paid for others to benefit. The fund is the aggregate of the entire increase levy charged on the importation of wheat and the rate paid on the loan is 5% and about 30% of the loan is a grant meaning 70% of the loan will be paid on 5% interest rate.

How structure is your association?
If you want to be a cassava processor, you need 50million naira to invest on basic necessary things. The entry barrier is the problem for many people and a starter may not be able to benefit from this loan as some of us have burnt our hands with our investment, and government is now ready to intervene by supporting us with this loan so that we will be able to bring back to life our moribund factories. The process of getting the loan is through the BOI that will visit your site when our association must have certified you as member.

What is your take on cassava bill?
Every economy of the world has local content economic policy. It is only this country that anybody can just do anything. For every wheat flour produces in Nigeria, there must be a legislative law that must enforce a percentage of cassava flour inclusion as it was initiated by the FAO in the 50s and this is coming based on the alarming rate of bill on wheat import in Africa. The idea is to encourage local composite products a substitute for wheat, rice and sugar. So this bill should be accepted on arrival as Boko Haram is hitting us despite our large expanse of land.  India and China decide to lock up their economy from importation to get to where they are today.

This must be done in Nigeria as we must be ready to produce and eat what we produce. In the Brewery industry, we used to import barley into the country until a policy thrust came and asked for inclusion of sorghum as substitute to produce energy food  drink of Malta Guinness  and this is kind of policy that can positively make impact in the lives of people especially farmers. We need to take the bull by the horn. We are tired import dependant. The bill is an inclusive bill as stakeholders from both the private and public are carried along in the bill.