The road from a pig farm in Iowa to the offices of economic development in Abuja is a long one. So, you need to saddle up for the ride.
Even as US grocery stores struggled to remain stocked with meat, pig farmers were killing the livestock in the thousands and struggling to dispose them. It was another anomaly of the coronavirus economy. The outbreak did not disrupt the breeding of livestock, but it interrupted their delivery to consumers.
The livestock business, like most others, has various components. There are the farmers who do the breeding, the plants that do the processing, the drivers that do the delivering, and the grocery stores that do the marketing to consumers. The disruption of any one of the components means the collapse of the industry.
That’s what happened when there was an outbreak of coronavirus among workers at meat-processing plants. One after the other, the plants shut down, and that brought the entire industry in the area to a halt.
Pig farmers were especially susceptible. Others could keep their livestock for a long period of time. But pig farmers have to market their stock within weeks. You see, those rotund animals grow very fast. And beyond a certain size, they become too big for the processing machines. That left the farmers with little choice but to kill them off.
“The number of pigs being slaughtered but not used for food is staggering,” the New York Times reported in mid-May. “In Iowa, the nation’s largest pork-producing state, agricultural officials expect the backlog to reach 600,000 hogs over the next six weeks. In Minnesota, an estimated 90,000 pigs have been killed on farms since the meat plants began closing last month (April).”
To arrest the situation, President Donald Trump declared meat-processing an essential service and ordered the plants to reopen. But that couldn’t happen at the snap of a finger. And even after they re-opened, it was a stretch trying to catch up with the backlog.
This crisis in America’s pork industry holds a mirror to Nigeria’s economic difficulties. At the best of times, the Nigerian economy is bedeviled by similar disruptions and distortions. And so in the midst of abundance there is scarcity—and poverty.
I still recall from many, many years ago — while I was a primary school boy in Umuahia — the mounds of oranges dumped at the railway station. The neighbourhood kids would trek down there, retrieve some unblemished ones, and set up ‘stands’ on the street to sell them.
I don’t suppose any of us became a Dangote from the enterprise. But we might have if we could have carted away all the oranges to a processing plant. We could have turned them into orange juice that is preserved and marketed—perhaps internationally. Rather, while the bulk of the oranges rotted away, Nigeria was most likely importing orange juice.
More than 50 years later, I just read a similar story about tomatoes. Bloomberg News recently reported that as much as 45 per cent of Nigeria’s tomato produce goes to waste. Thus, though Nigeria produces about as much tomato as it consumes, it imports about half of its consumption—mostly from China. The estimated annual cost is $360 million.
Mind bugling? Well, of course. Yet, it gets even more so.
In March 2016, Nigeria’s foremost industrialist Aliko Dangote launched a tomato-processing plant near Kano to put an end to the imports. But a price dispute with farmers, along with inadequate supplies, forced the plant to close toward the end of 2017.
It resumed production in March this year, only to find that many tomato farmers have switched to other crops. Now, the plant is operating at 20 per cent of its 1,200-ton-a-day processing capacity. And so the wasteful importation continues.
That might change if Dangote Farms, as the company is called, succeeds with Option B. It has acquired a large farmland for purposes of farming enough tomato to meet its processing capacity.
But Nigeria being what it is, who knows what might scuttle that goal? So far, petroleum and electric power productions have both defied all attempts to make supply reflect Nigeria’s abundance.
According to the Nigerian National Petroleum Corporation, its four refineries (two in Port Harcourt and one each in Warri and Kaduna) have a combined refining capacity of 445,000 barrels per day. But at any given time, they produce much less because of one problem or another. In fact, for periods of time, they produce none at all.
That’s about to happen. The NNPC announced early in April that it would be shutting down all the refineries for upgrading. Similar announcements have been made repeatedly over the years.
“The three refinery sites in Africa’s largest oil exporter have worked only sporadically due to years of underinvestment,” Reuters states in reporting the announced closures. “It has been working to revamp them, but has struggled to find external financing to do so.”
That is to say that Nigeria’s cash cow cannot finance itself.
Meanwhile, as with tomato processing, Dangote has stepped into the refining breach. His mega-refinery in Lekki (near Lagos) is projected to have a capacity of 650,000 bpd. That is about 46 per cent greater than the NNPC’s four refineries combined.
When it goes into production by the end of the year as projected, it could put an end to Nigeria’s importation of petroleum. But then, who knows?
The story of electricity supply even more closely mirrors America’s pig farm difficulties. In most countries, it takes a crisis to disrupt electricity supply—civil wars, earthquakes, hurricanes and the like. In most Nigerian cities, a daily or multiple-day blackout is the norm.
Sometimes, the shortage is attributed to generation shortfalls. Other times, it is the distribution sector — inadequate grids, for one. At other times, revenue generation is blamed — fraud by fees collectors or cheating by customers.
Meanwhile, as Nigerian cities remain in the dark, Nigeria supplies electricity to neighbouring countries. And with that supply, they maintain regular electricity service.
Befuddling? Again, yes, of course. And we can’t even blame coronavirus.
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