DOES the Federal Government have the political will to enforce its decision to increase tariff on imported wheat flour?
Some stakeholders are not convinced that the government has the will to execute the policy because it may be detriental to the people’s well-being. To them, the 40 per cent cassava flour input is too high.
When former President Olusegun Obasanjo approved 10 per cent cassava flour inclusion in bread baking, many who took the cassava bread then confessed that it was not delicious.
Later, bakers sought a reduction in the cassava content of the bread. The government yielded to their request, slashed the percentage by half and eventually threw out the policy.
According to the Executive Vice-Chairman, Honeywell Flour Mills Plc, Mr Babatunde Odunayo, despite the goverment’s good intention to use cassava to boost rural development and urban decongestion, its unavailability and lack of technology by local millers to process the volume required could frustrate the effort.
He described the situation as a challenge to flour makers, despite their willingness to use cassava.
Odunayo argued that manufacturers might not have any choice at the end but to maximise the profit with the new import duty, which he said could lead to increased prices in other things, especially bread and wheat.
“Wheat is a major raw material in the production of our products. It actually accounts for over 90 per cent of the total raw material input and it is wholly imported. The price of wheat is influenced by so many factors most of which are beyond us as local users. For example, the Federal Government recently announced an introduction of a 15 per cent levy, in addition to the five per cent import duty for wheat. This necessarily means an increase in the production cost of flour and other wheat based products from millers,” he said.
An economist, Ismail Quadri, said because some of Nigeria’s policies in the past were unplanned and poorly researched, they did not work.
He said: “There is nothing bad in cassava components but the fact remains that necessary research and consultation among stakeholders have not been done and this is dangerous to the market.
“To me, this is another bandage approach that will later expose the wound and create hardship for the masses, who either earn their living or consume the wheat based on products because as it is, it is obvious that price of these commodities would be jacked up”.
Again, despite government’s insistence that the primary goal of the new cassava policy is to cut wheat imports by 40 per cent by 2015 to conserve foreign exchange earnings and increase employment, there are insinuations that its estimation that wheat imports worth N635 billion (about $4.2billion) in 2011 were overstated to demonstrate that wheat imports hurt Nigeria’s foreign exchange earnings and worsen the rate of unemployment.
He said these figures, even if they include cost, freight, insurance and duty, were high, adding that over $1.8 billion is spent on wheat imports annually using the same cost, freight, insurance and duty schedule.
The Lagos State Chairman of the Association of Master Bakers and Confectioneries, Jacob Adejorin, confirmed that the price of bread had increased since September 1, following the increment of price of flour and other ingredients by N1, 000.
He said: “Members of our association have no option but to increase the price of bread because of the N1, 000 addition on the price of flour.”
An industrial expert in Lagos, Dr Ado Ahmed, said: ‘‘The government should review the policy of increasing tariff on wheat and flour because it is a vital policy thrust that could be detrimental to the well-being of the common man on the street because Nigerians eat a loaf of bread depending on the price and size. When the prices of bread and other allied foods skyrockets, it will deny Nigerians the meal they like best; therefore, may lead to protest that will endanger the peace of the country by the importers and master bakers.’’
He said the government should not be in a hurry to go ahead with the proposed increase of wheat and flour tariff.
“The announcement alone may cause panic importation that may be used to increase the prices of bread, biscuits, spaghetti, noodles and others,” he said.
A consumer, Cynthia Abaribe, who feared that the increase on import duty would affect noodles and other products, said the policy would only make life more difficult for the average Nigerian.
“As a student, noodles and bread are my last result whenever I think of taking a quick food that would be affordable, when the sons and daughters of the rich might settled for fast food joints. Now that the prices of these commodities are set to go up, what is the hope? I think the government needs to consider the masses and have a rethink,” she said.
For a long time, bakers have been on the edge over rising costs of ingredients needed for the production of bread and other confectioneries. As a result, many small scale bakers have been compelled to abandon baking.
Although industrial researchers believe that the inclusion of five per cent cassava flour in wheat flour could lead to a drop in the cost of baking flour, not all flour millers have heeded the government’s policy. Hence its impact on the price of flour is not yet felt by bakers.
