With income tax exemption on cashew, N150b investment to Nigeria underway

The National Cashew Association of Nigeria (NCAN) says the five years income-tax exemption granted cashew processors by the Federal Government is expected to attract direct investment to the tune of N150b into the country.

The National Publicity Secretary of NCAN, Anga Sotoye, who disclosed this to The Guardian, said the singular pronouncement will be of immense help to the country because the cashew economy is critical to the country’s economic diversification, adding that for the country to stimulate growth in the sector, there’s need to encourage more investment in the cashew production, processing and value addition.

Recall that the Minister of Industry, Trade and Investment, Adebayo Adeniyi, while speaking at the just-concluded 16th edition of the African Cashew Alliance (ACA) conference in Abuja, announced that Nigerian companies involved in cashew processing would enjoy five years income-tax exemption as part of government’s efforts to diversify the economy and boost the food and agriculture sector.

While noting that the incentive is a big relief to the sector, Sotoye said investors going into value addition for cashew will understand that if they have tax relief for five years, they can concentrate and do their business, adding that the incentive is critical to boost their businesses.

Said he: “Investors go to where they have incentives. So, what the minister has done on behalf of the Federal Government is to provide the incentive that is required for investors to invest in the cashew value chain. So, it is very important that it is coming at the right time and we appreciate the initiative, it’s laudable.

“We are looking at the huge investment coming into this, we expect that by this singular pronouncement, we will be looking at about N100b to N150b direct investment that’ll come into the country, that’s what we expect, and we’ll take it seriously. It will become our strategic selling point to move the country forward.

“We need more incentives for the sector because to grow a sector you’ll need to incentivise that sector and this is time to really incentivise the cashew sector to be profitable, viable and it will attract investors that’s the key thing. So, as much as we thank the government for doing this, which is a step in the right direction, we are asking for more, we need more incentives for the sector.

“In the country, you’ll have to pay to get power because light is not constant and when you produce cashew, you’ll compete with other processors across the world, so you have to be competitive. So competitiveness is about how efficient you are producing and at what cost you are producing your cashew. So, if your cost is high, your customers will run away from you, that’s the point we’ve been highlighting for the government to understand and support the cashew sector.”

Sotoye emphasised the need for all players in the sector and government to ensure that the incentive is understood across board so that another government agency will not go contrary to the initiative.

On his part, the President of ACA, Tola Faseru, who lauded the initiative, said: “We have said it many times that the government must provide an enabling environment for value addition to thrive. In Nigeria, though we produce a lot of commodities, only a little percentage is processed, so there’s a need to encourage processors and that’s what the minister has pronounced.

“As you are aware, for cashew, we produce about 270,000 tonnes yearly and we process less than 10 per cent of it. And you know the way the country is now, there’s a need to generate more foreign exchange. When the value addition is done, then we can plan more and do like what Vietnam is doing. From 300,000 tonnes that they produce, they are generating close to $3.5b, whereas we produce 270,000 tonnes and we generate just $450m.”

Faseru is optimistic that within a short time, through the tax-incentive, the country should be able to generate about $4.5b from cashew, if the cashews can be processed. “Vietnam does not only process what they have, they also import from Africa – the largest importer of cashew from Africa. So, by exporting our raw cashew to Vietnam we are exporting our jobs and our earnings, that’s what the minister tried to reverse, to change the narrative.

“As stated by former President Olusegun Obasanjo at the conference, we should be able to double our production by 2030, and also be able to process all that we produce. This will encourage more people to go into cashew processing. Cashew is the second non-oil foreign exchange earner for Nigeria; it will boost our foreign earnings and increase job opportunity.”