Nigeria cashew nut farmers to sign US$9m agreement with foreign investors

NIGERIA – Cashew farmers in Nigeria are set to sign a N3.6bn (US$9m) Memorandum of Understanding with a group of foreign investors in order to attract the required funding to grow the sector’s revenue to N220bn (US$606m) annually from the initial N50bn (US$137m) earned annually.

HOMENA Director of Administration, Victor Onuche, said, “Now, we are hoping that when the farmers and the financing agencies sign the MoU, in the next one year we hope that Nigeria can move up from the initial N50bn (US$137m) to N220bn (US$606m) annually.’’

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‘’We have about 20 off-takers in Nigeria and now we are targeting at least additional foreign 15 off-takers,” he added.

The HOMENA boss said the major challenge hindering cashew production in Nigeria was that of inadequate lending as the financial institutions in Nigeria were not living up to their responsibilities of lending to farmers.

According to a former official of the National Cashew Farmers Association of Nigeria, Isaac Ojonugwa, said Nigeria was currently producing about 220,000 metric tonnes of cashew. He noted that the association discovered that the products often ended up as waste because of high cost of production in Nigeria.

In addition to that cashew nut farmers in the country have lost approximately N99 billion (US$273m) since the commencement of production this year according to a report by the guardian.

In 2017 and 2018, a tonne was bought at the rate of N600,000 (US$1,655). This year however, the cost plummeted to N150,000 (US$413) per tonne. The figure implies that there was a lose N450,000 (US$1,241) incurred on every tonne sold. Multiplied by 220,000 metric tonnes, the farmers are set back by a staggering N90 billion (US$248m).

The Guardian’s investigation revealed that gridlocks in Apapa (Western Lagos) prevent containers of raw materials, including agricultural products, from leaving the port for various destinations in Europe, Asia and America, contributing significantly to low demand for the nuts.

Two major ways the gridlocks affect products are: deterioration through re-absorption of moisture and inability of exporters to meet deadlines.

“One of the major reasons is that the road leading to our port is bad. The trailers take several weeks before they can get to the port.’’

‘’Most of exporters take short-term loans from the bank and are not able to meet up with either supply or repayment of loans,” said Dr Akin Oloniruha, a cashew breeding and plantation specialist at the Ahmadu Bello University College of Agriculture, Kabba, Kogi State.

The solution, he said, is for Nigeria to develop the capacity to process nuts locally. According to him, this will reduce exportation of raw materials and exposure of farmers to price fluctuations.

Some analysts however noted that the downturn could also be blamed on shrinking global demands and inability of exporters to meet up with orders from Vietnam, a major buyer of Nigerian nuts.

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