Nigeria, one of Africa’s largest tomato producers, is paradoxically spending over $360 million annually on imported tomato paste. At the heart of this contradiction lies Dangote Tomato Processing Limited, a multi-billion-naira plant under Aliko Dangote’s business empire, now struggling to survive. Despite its commitment to quality and local production, the factory in Kadawa, Kano, lies dormant, unable to compete with cheap, substandard imports and crippling operational costs.
The Rise and Fall of a Local Giant
Dangote Tomato Processing Limited was once a beacon of hope for Nigeria’s agricultural sector. With a vision to reduce the country’s reliance on imported tomato paste, the plant aimed to leverage Nigeria’s status as one of the top tomato producers in Africa. However, the reality today is starkly different. The factory, which once thrived, now stands idle, a victim of fierce competition from low-quality imports and soaring operational expenses.
Former Managing Director Abdulkarim Kaita has pointed fingers at the government for failing to protect local industries. He argues that the unchecked influx of cheap Chinese tomato paste has made it impossible for local producers like Dangote to compete. Chinese imports, often containing starch, flour, and minimal tomato content, are significantly cheaper than Dangote’s 100% fresh tomato products. This price disparity has driven consumers, many of whom live in poverty, to prioritize affordability over quality.
High Operational Costs: A Double Blow
Compounding the problem are the high costs of energy and fresh tomatoes in Nigeria. Dangote Tomato Processing Limited relies on locally sourced tomatoes, which are subject to price fluctuations and seasonal shortages. Additionally, the high cost of energy further inflates production expenses, making it difficult for the company to offer competitive pricing. In contrast, imported tomato paste benefits from subsidies and lower production costs abroad, creating an uneven playing field.
The issue is further exacerbated by increased smuggling through Nigeria’s borders. Smugglers capitalize on the demand for cheap tomato paste, flooding the market with substandard products and undermining local industries. With a national demand for tomato products reaching 3 million metric tonnes, Nigeria is forced to rely heavily on imports to bridge the supply gap. This reliance has made Nigeria the 13th largest importer of tomato paste globally and the third largest in Africa, importing over 1.3 million metric tonnes annually.
The plight of Dangote Tomato Processing Limited highlights the urgent need for government intervention. Policies to curb smuggling, enforce quality standards, and provide subsidies or incentives for local producers could level the playing field. Additionally, investments in agricultural infrastructure and energy solutions could reduce production costs, making local tomato paste more competitive.
Conclusion
The struggle of Dangote Tomato Processing Limited is a microcosm of the challenges facing Nigeria’s agricultural sector. While the country has the potential to be self-sufficient in tomato production, the lack of protection for local industries and the influx of cheap imports are stifling growth. By addressing these issues, Nigeria can not only revive its tomato industry but also strengthen its economy and reduce its dependence on foreign products.