By Edwin Nwanojuo
The Nigerian Government is currently gambling with over 1.5 million jobs that would have been created if it implements the Import Adjustment Tax (IAT) on imported starch.
The import adjustment tax which was initiated during the March 13the and April 20th Economic Recovery Growth Plan (ERGP), suggested an increment on the import duty of starch to enable local processors compete favorably in the market.
Currently, importers of starch are charged 5 per cent to 10 per cent import duty, which still makes them sell starch at a very low price, compared to local manufacturers who are faced with many challenges in clouding infrastructure deficit and difficulty is sourcing raw materials, which makes them produce at a very high cost, thereby making their products more expensive than the imported starch.
At the Economic Recovery Growth Plan meeting (ERGP) which held between March and April this year, the local processors of starch asked the government to increase the import duty on imported starch to 40 per cent to 60 per cent to enable the local producers compete favorably.
According to the Chairman of Harvest Feeds and Agro Processing, Goke Adeyemi, “This will immediately translate to demand for locally produced, but global quality standard Cassava Starch produced in Nigeria”.
He further said Huge jobs will be created in the neighbourhood of 500 000 jobs direct and over 1mln jobs indirect, through cassava cultivation and cassava logistics. Huge scarce FOREX will also be saved for our dear country to address infrastructural gaps genuinely being pursued by this present administration.
It was gathered that imported starch is sold for about N150,000 per ton, while the locally processed starch is sold for about N220,000 per ton, this is exactly why manufacturers prefers to patronize the imported starch instead of its local counterpart.
Currently, Nigeria’s annual requirement for starch is about 600,000 tons, and a ton is sold for N220,000, that means the annual value of starch in the Nigerian market is N132 billion.
Unfortunately, a large chunk of this N132 billion is exported to other countries through the continued importation of starch which can be processed locally if enabling environment is made available by the government for both the farmers and processors.
Adeyemi added that “the users of starch in Nigeria are hugely importing to the country and continue to deprive the local cassava starch processing factories of patronage.
Ahead of anticipated huge demand occasioned by the IAT increase, my company has invested $5m ( five million USD) for expansion of our current capacity. We need the ERGP to fulfill their promise and implement the recommended increase in Import Duty for cassava starch coming into Nigeria”