Processing is one of the core pillars of production efficiency in the agriculture value chain, which has been identified by experts as key to Nigeria’s strive to maximise its potential in agriculture. As such, increased advocacy has trailed the need for a departure from the practice of production based agricultural system to a value addition focused system that can develop the sector to a considerable level of efficiency.
The Bill & Melinda Gates Foundation has not merely looked at the ripple effects that the value addition process could have on the value of production, but is technically exploring the potential of processing in eliminating the age-long economic burden generated by under nourishment in Nigeria. The cost of malnutrition in Nigeria, according to available statistics is well over $1.5 billion in annual gross domestic product (GDP) and a higher healthcare cost because, the scourge, apart from incapacitating individuals and families from achieving their goals results in a setback to national economic growth and development. The impact of malnutrition on the global economy is estimated to be about $3.5 trillion yearly with Nigeria top of the malnourished population in Africa.
Therefore, to downplay these effects by at least 40 percent by 2025, the Gates Foundation in concert with the Aliko Dangote Foundation and the federal government embarked on a roundtable discussion with the behemoths of Nigeria processing industry, over the weekend. The focus was to ensure that chief executives like Aliko Dangote, the Dangote Group president; Abdul Samad Rabiu, the BUA Group Chairman; and Santoshi Pillai, managing director PZ Wilmar among others, integrate fortification in the processing of food commodities such as oil, wheat flour, salt and sugar with vitamins and minerals including iron, folate, iodine, zinc, and vitamin A, which are nutrients proven to be sustainable and cost effective tools in addressing malnutrition.
Yemi Osinbajo, the vice president, represented by Babafemi Ojudu, a former senator, Aisha Abubakar the minister of state, Federal Ministry of Industry, Trade and Investment, Shawn Baker the director, Nutrition and Global Development, Bill and Melinda Gates Foundation and processors signed a communiqué to boost enforcement of key regulations and incentivise adherence to operating standards; integrate food fortification as key performance indicator in corporate framework evaluation, as well as foster the enabling environment that provides technical solution for sustainable production.
Food fortification is the deliberate addition of micronutrients (vitamins and minerals) to foods during processing, in order to increase the amount of micro-nutrients in the food supply. Large scale food fortification in Nigeria dates back to 2002 but compliance had been at a low ebb on challenges of industry stakeholders with fortification standards, limited coverage of adequately fortified foods and weak enforcement of standards and regulations.
Minister of state, Abubakar, speaking on the agreement pledged that one of the key contributions of government would be to eliminate barriers in the way of competitiveness of food processing industries by ensuring that the operating environment becomes less of a hassle for processors. She stressed that efforts would be made to encourage all levels food production to be fortified in view of resolving the health challenges, especially in the nation’s minor population.
“This meeting was to ensure that everybody is on board. We had meeting with the CEOs to ensure that they will commit to ensure that they fortify their products and government will also commit to making sure that whatever challenge they have in the industry, which is basically the cost of nutrients, that government is able to do something to reduce their cost of production,” she assured.
Similarly, Shawn Baker, director, nutrition and global development, Bill & Melinda Gates Foundation, said the foundation will primarily focus on providing technical support to processing industries with the backing of Techno serve, an international development agency contracted by the Bill and Melinda Gates Foundation to implement a project on strengthening African food fortification. He explained that support will also be given to government agencies to stifle regulations against unwholesome practices in the country.
Baker, addressing the role of farming in the fortification process said the Foundation has dedicated funds to support farmers through the ministry of agriculture, adding that efforts were on with the IITA to develop methods that farmers can apply in the field to prevent pest attacks and infections.
“We have actually been working on large scale on food fortification over 15 years because when you think about malnutrition, you think about a severely wasted child on the street; but a more huge problem are deficiencies in essential vitamins and minerals or immune functions which can lead to death, they can lead to birth defects. But food fortification is almost a miraculous way you can help resolve that by adding to commonly consumed food in the case of Nigeria, salt, flour, cooking oil and sugar. The industries represented at the dialogue make up over 70 percent of the market of all of those foods consumed by Nigerian households, everyday, by effectively putting in those nutrients to ensuring that mums and kids are getting many of the essential nutrients.”
Santoshi Pillai, the managing director, PZ Wilmar West Africa, voicing the stance of the processors, assured that processing procedures will be made to align with global best practices in order to win the fight against malnutrition.
Pillai pointed out that it was imperative for industries and private sector partners to address key themes of understanding malnutrition and how it can be resolved in terms of food fortification. “Education of Nigerian consumers, lack of compliance, the role of SON, NAFDAC in ensuring that there is compliance will be our focus. In terms of cost, there is an assumption that food fortification is very costly. So, we discussed what we should bring the cost of these items down to and then we discussed that we should look at the government reducing tariffs.”
According to the communiqué, companies shall be committed to strengthening internal systems that enable compliance with fortification regulations. By 2020, they would strive to achieve 100 percent compliance with the food fortification standards, as verified by independent, third party monitoring, while annual reports would henceforth come from independent, third party monitoring to show the progress made.
On the government path, the ministry of industry, trade and investment, on behalf of the federal government will see to “reviewing a position paper with specific requests and policy options to address prohibitive tariffs on micronutrient premixes and clearing charges by September 2018 as a means of facilitating private sector led food fortification through lowered operational costs.”
This is expected to be realised in collaboration with the Nigerian Industrial Policy and Competitiveness Council and will include a re-evaluation of products along the supply chain, such as those classified as raw materials, finished products, or premix chemicals. By reducing the costs related to doing business and improving quality, specifically as it pertains to fortification, the government believes it will encourage companies to strengthen their commitment to innovative methods to add value to consumer products.
The communiqué also noted that relevant government agencies would be engaged on issues relating to the importation of in- adequately fortified staple foods. In collaboration with relevant agencies and stakeholders, policy reviews and actions towards ensuring that imported flours, edible oil, sugar and salt meet the minimum standards for quality would be ensured by next October 2018.
Larry Umona, the country director, Technoserve, explained that the firm will provide customised technical assistance to food processors in the wheat flour, vegetable oil and sugar sectors.
The staple food process- ing sector, particularly wheat flour, edible oil, and sugar can reach over 80 percent of Nigeria’s population and has the potential to deliver a significant proportion of essential micronutrients to the population through fortification, said an analysis by a technical firm.
Adequate compliance with the legislated fortification of maize flour, edible oil, salt, sugar, and wheat or semolina flour is estimated to cost the industry around N317 billion (US$ 49 million) every year. But given that the flour milling sector in Nigeria has an annual turnover of more than N1 trillion (US$ 3 billion), fortification accounts for less than 1.6 percent of the turnover and less than 1 percent of the retail price. That would invariable amount to a higher distribution of fortified foods rich in vitamin A and substantial amounts of iron, zinc, and other micronutrients as in many advanced countries.
While fortification increases the operating capital required by industry, for instance due to procurement of vitamin and mineral premix, the additional costs could be recoverable from marginal price adjustments shifted to the consumer. In spite of the estimated cost to the industry, food fortification remains cost-effective solution for Nigeria in light of the fact that fortification annually costs N17 billion (US$ 49 million) compared with the N500 billion (US$ 1.5 billion) annually lost in GDP to vitamin and mineral deficiencies. Moreover, the per capita costs of fortification remain quite low at about N125 (US$ 0.36) per individual each year for adequately fortifying salt, wheat flour, sugar, and edible oil.
Globally, the fortificants are estimated to contribute 80 percent to 90 percent of the costs of fortification, whereas in Nigeria they contribute more than 96 percent of fortification costs. Micro- nutrient costs contributions are higher in Nigeria as a result of peculiar challenges, including issues around import tariffs, clearing charges, and foreign exchange. While raw materials attract documented duties and levies of five percent to 10 percent, premixes can attract duties and levies from five percent to 20 percent or more, depending on their composition and consequent classification as raw material or as finished good. Consequently, the onus lies more on government to support processing industries in their pursuit of initiatives aimed at self regulation.