II

Achieving a $5b Cassava

Industry in Nigeria

A Road Map

Professor Lateef Sanni

Federal University of Agriculture, Abeokuta, Nigeria

Email: sannilateef5@gmail.com

National Cassava Summit

8th September 2016 Sheraton Hotel, Abuja

II

“By 2021, Nigerian cassava industry

•represents over 5 billion dollars,

•spurs rural industrial development,

•generates millions of new jobs,

•creates wealth for over 45 million people,

contributes to national food security.”

Our vision

II

Industries add value to cassava

Farmers provide

cassava

Incomes for farmers

Value addition from cassava

Jobs

Imports

Food

security

II

How does this work? Who is involved?

II

How it does not work (1)

II

How it does not work (2)

II

Cassava Industrial Strategy

Products Annual

Demand

Current

Supply

FCR Additional No.

of Players

Required

Cost per

player

($)

Starchtons

269,000 20,000 1,345,000 13 2 million

Ethanollitres

200 Million 9 Million 8,000,000 2 46.6m

HQCFTons

504,500 60,000 1,778,000 8 9m

Glucose

syruptons

90,000 30,000 123,200 2 17m

II

Investment Outlook

Products Demand

T/ year

Incremental

Value

000 NGN/t

Industry Value

mn NGN

Equivalent

in USD*

Starch 269,000 207.4 55,791 141.24

Ethanol 1,408,450 40.3 56,746 143.66

HQCF 504,000 1,382.0 696,528 1,763.36

Glucose 90,000 554.6 49,912 126.36

Gari / Lafun / Fufu 10,000,000 69.3 692,830 126.36

Cassava roots 40,000,000 20.8 831,475 2,105.00

2,383,991 6,035.42

* Exchange rate (NGN/$) 395

II

Potentials of the Cassava Value Chain

Hig

h P

ote

nti

al

Med

ium

Po

ten

tial

Definition Potential Market Size (tons of roots p.aOpportunities Feasibility

–Most optimistic

in terms of

economics and

technical

feasibility for

growth in the

short to

medium term

–Opportunity

has

significant

caveats that

might limit

growth

Low feasibility

High feasibility

10,600,000Gari/Lafun/Instant fufu

HQCF 418,000

1,408,450

1,345,000

123,200

300,000I

Chips for Export

600, 000Livestock feeds

Sugar Syrup

Ethanol

Native starch

II

HQCF Strategy for import substitution

Incentives for buy in Awareness creation

Sausage rolls:

replacement of 100% wheat

flour / maize starch binder

in filling

Bread: replacement of

10 to 20% wheat flour

Biscuits: replacement

of 20% wheat flour

Paperboard: 100%

replacement of maize

starch in paperboard glue

Aggregate Demand (t/yr)

Current 60,000

Potential 504,500

Achievable 300,000

Nutritional

HQCF for home use i.e. pancake, puffpuff..

II

Starch Strategy

1.15 million MT cassava roots

to substitute 50% imports

13 additional Players to

meet annual demand = $

Medium to Long-term (3 years and above)

•Promote large-scale factories

using 100,000 – 500,000

tonnes of raw materials per

day

Short Term (1-2 years)

• Increase raw material supply

• Promote investment in Starch

industries & related public

infrastructure.

• Promote Clustering & Out-

grower schemes

• Develop R&D on varieties with

higher starch content

Domestic demand

269,000 MT starch

II

Ethanol Strategy

>200 million Litres

Annual Demand p.a.

Short Term (1-2 years)

• Increase raw material supply

• Develop Clustering and Subcontracting

• Develop R&D

Medium Term (2–5 years)

•Pursue local fabrication of ethanol

production equipment

•Gradual Reduction of imports

•Investment Promotion

1,408,000 MT of FCR required

Aggregate Demand Root equivalent (t/yr)

Current 360,000

Potential 10,200,000

Total estimated 10,600,000

Industrial alcohol from Brazil

US$2/litre

II

Glucose Syrup Strategy

Medium Term (2–5 years)

•Promote medium size factories

3 Factories required 360,000 MT of cassava roots required

Short Term (1-2 years)

• Increase raw material supply

• Promote farm gate processing of cassava into chips

• Investment incentives for storage and warehousing

• Develop food regulation and legislation

• Develop Clustering and Subcontracting

• Develop capacity building in packaging and

marketing of staple foods

• Develop R&D

Domestic demand

of 90,000 MT

glucose syrup

II

Livestock Feed Strategy

Cassava peels, grits, chips are viable as animal

feed and fish feed *

Given the large amount of aquaculture and

Livestock done in the Nigeria, this could be an

interesting prospective market

Cassava

chips

Cassava

Pellets

Cassava

meal

Cassava

residual pulp

* not necessarily viable for poultry feed

Technology

Development

Animal Nutrition

Sharing

experience from

Nigerian

Companies and

others in Brazil,

Thailand

II

Traditional Food Strategy

Most popular traditional foods from cassava

Garri Fufu1 2

$1,754 Billion Industry

with 10,000,000T

cassava roots required

for Traditional Staple

Foods

Branding/packa

ging

Semi industrial

tech dev

Nutritional

Energy efficiency Business linkages Women professionals

Job creation

II

Cassava Production Strategy

Way Forward

•Availability of improved

planting material

•More efficient use of inputs

•Increased Mechanization

•Increase yield > 25T/HA

•Increase access to finance

•Promote farmers‘ groups

development

Small-Scale

commercial

farmers

Medium-scale

farmers

Large-scale

farmers

10

Million

Tons

5 Million

Tons

25

Million

Tons

Out-Growers

Bulking

Agents

Farmers

Group

Formation

Target

40 million Tons FCR

Additional

Farmers Output

by 2020

II

Trains 300 farmers / year

Adoption (assumption)

240 trained farmers adopt

75% of GAP each 1 ha

Economics of cassava extension

Annual cost of 1 extension agent NGN

Wage, insurance 3,400,000

Depreciation motorbike 100,000

Allowance & fuel & airtime 168,000

Supervision, M&E 382,800

Refresher training 80,000

Trainer equipment 35,000

Training material for farmers 45,000

Total cost 4,210,800

Total Profit of 240 farmers NGN/year 27,700,000

Cost / Benefit Ratio Extension

1 operational & funded extension agent1 : 6.6

More and better cassava + 100%

Condition

Clear deliverables

Results-based funding

Rigorous M&E

Inputs available

Source: GIZ, A. Matthess; based on cassava training material & economic analysis

II

Potential for Job Creation and Import

SubstitutionCassava Production

(16,000,000 jobs)

Industrial Cassava Processing

(10,000,000 jobs)

Sales and Marketing

(5,000,000 jobs)

Modern Cottage Processing

(5,000,000 jobs)

Haulage and Transportation

(9, 000,000 jobs)

Up to 74% income increase for

thousands of farmers supplying

FCR

New Product and New Market

Development

New Product and New Market

Development

Youth Involved in Cassava Business

II

Standardization of cassava products

We now review the Standards for Cassava Based

Products:

Cassava Starch

High Quality Cassava Flour

Cassava-Wheat Composite Bread

Determination of total Cyanogens of FCR & Cassava Products -.

Gari, Odourless Fufu, Tapioca,

Glucose Syrup

Bio ethanol

Standards was largely derived from ISO, Codex

Alimentarius

Harmonization of registration procedures, bag sizes and

fees

Collaboration with Quality Infrastructure of UNIDO

II

Regulatory and Legislative Framework

Agricultural Policy

• Support publicity on

HQCF inclusion policy as

PPP

• Promotion of local

content in Cassava

industrialization

• Promotion of crop

cultivation insurance

contracts policy excluding

exogenous default risks

• Consistent investment in

Cassava R4D

Trade Policy

• Import restriction on cassava based

products and close substitutes

• No Import Duties on Agricultural

machineries and agro processing

equipment

• Single digit credit facilities for cassava

value chain actors on clear financial

products

• Tax holiday for new investors in the

commodity sector

• Promotion of bottom up cooperative

policy for cassava value chain

II

ROAD MAP!

Ensure the consistent raw material supply to end user

industries

Stimulate increased private sector investment in the

establishment of cassava industries

Facilitate the establishment of targeted support

infrastructures

Advocate for conducive policy and institutional reforms

for the development of the Nigerian cassava sector.

Promote result based funding of extension services

Collaboration among Cassava Based Projects on the

Cassava Industry Development Goal.

II

Industries add value to cassava

Farmers provide

cassava

Incomes for farmers

Value addition from cassava

Jobs

Imports

Food

security

THANK YOU FOR YOUR ATTENTION !!