Nigeria imports 350m litres of ethanol yearly as experts suggest solutions
• Produces about six per cent of national need
• Cassava can fill the gap with good policies
Despite the abundance of cassava roots as essential raw materials for production of ethanol and the government’s import substitution policies, Nigeria produces about six percent of the national need and imports between 300 million and 350 million litres of the product yearly.
This incapacitates the local industry players, prevents the entry of new ones and exports jobs and wealth opportunities to other countries in Europe and America by sustaining their factories.These were the submissions of Mr Rajavelu Rajasekar, a director of Allied-Atlantic Distilleries, near Agbara, Ogun State, in an interview with The Guardian.
Speaking on the potential of the country to produce ethanol and stop importation, Rajasekar said existing factories producing ethanol do not have a problem selling their products, and that more giant investors are needed to close the demand gap, but unfavourable policies give undue advantages to importers, creating an unhealthy competition with the local industries.
“We do not have a problem with the market because Nigeria is a net importer of ethanol even till now. The first ethanol company is ours, and there is another one now. We produce 9 million litres, whereas the import is between 300 and 350 million litres in a year,” he said.Another company producing ethanol is Unichem, and together, the production could only take care of about six per cent of the total yearly requirements.
“So, we produce three to four per cent of the total demand. Now, Unichem is also producing ethanol, but altogether, we can only meet five to six percent of the demand.“So, there is very huge demand for ethanol and it is being met my importation. Importation of ethanol from Britain and other countries in Europe, which are made from sugarcane and corns, is sometimes cheaper than locally produced one from cassava.
“Sometimes, the users go back to importation. So, there is always imbalance and we often compete with the importers,” Rajasekar added. On the way the government can come in, the processor said, “If the government wants to support business in this country, it should actually come up with policies that will improve the agriculture-based import substitution in the country.”
He also urged the Federal Government to increase the tariff on imported ethanol and other agricultural products to increase home productivity, adding that “This will bring more factories up in the industry.” Another industrial policy that would have helped production and utilization of the roots is the cassava flour inclusion in the wheat flour, but poor implementation of the has jeopardised the essence, he said.
“Actually, the policy was introduced to be 10 percent and later 20 per cent in wheat flour. Truly speaking, it is not properly implemented. It is not being strictly implemented by the Federal Government. I do not think any miller is using 20 percent of the cassava flour …. They have reduced the cassava flour content to a little,” Rajasekar said.
However, Professor Kolawole Adebayo, a cassava value chain specialist, said increasing the tariff is not necessarily the solution to importation of the product because that would amount to putting the cart before the horse. “If you impose higher tariffs, it will become double jeopardies for the industries. However, coming of other industrial processors will make prices of cassava roots to stabilise because farmers would have ready markets and these fluctuations in prices would reduce. “To make this happen, we need to fix rural roads, power generation, transmission and distribution. I agree that we can produce more locally,” he concurred.