Nigeria spends $80b on wheat import from US

On August 31st, 2010, posted in: sep10news by

Bayo Akomolafe

Nigeria has spent a whopping $80 billion on wheat import from the United States of America (USA), making her the world’s single-largest importer from that country last year.

Alan Tracy, president of the US wheat trade group, US Wheat, dropped the hint at the Kansas City Marriott Downtown, where African and American government representatives and private business people gathered in a trade forum to discuss trade and investment opportunities.

“Wheat import is the second-largest business sector import, after the oil industry in Nigeria . We can take what is a very large business like flour milling and take it to the lower level (like establishing) small bakery outfits, which involve more people,” Tracy said.

It was learnt that the US exports to Africa increased to $18.5 billion in 2008 from $10.2 billion in 2005, while imports from the continent soared to $86 billion from $50.3 billion, according to the latest numbers from the Department of Commerce.

Last year,.Lafe Bailey, vice president of sales and services at the food processing company, Wenger Manufacturing in Sabetha , Kan. , had said the company was seeking to forge ties with African countries besides Uganda and South Africa , where it has already set up operations.

Forum participants echoed the July 31 Barron’s magazine article, which called Africa “the final frontier” while acknowledging, as the story did, that “misconceptions” abound.

They were also candid about inherent problems that hinder Africa ’s access to international markets. They cited expensive and unreliable power, outdated agricultural methods, lack of research, poor storage facilities and infrastructure gaps as the foremost challenges.

Under the US the African Growth and Opportunity Act (AGOA) preferential trade provisions, textiles and apparel have been the most dominant trade goods. But that has prompted the U.S. government to explore ways of steering the 38 eligible countries toward sharpening their agricultural productivity.

James Miller, undersecretary in the U.S. Department of Agriculture, said developing Africa ’s agricultural sector would have the double advantage of feeding the food-deficient continent while creating more trade goods for export.

Jeremiah Kung’u, managing director of Kenyan operations of the Export Trading Co., which is in 10 African countries, said 95 percent of farming in Africa is by small-scale farmers who lack adequate capital and skills to break into international markets.

Another challenge that African farmers face is the volatility of prices, which plummet during the harvest season when there is a surplus. That denies farmers a predictable and competitive income. Participants in the forum toured the Kansas City Board of Trade, whose market-making role is credited with guaranteeing American farmers stable and competitive prices for their grain.

Deborah Bollman, assistant vice president for marketing at the board, cited the current rally wheat prices as an advantage the exchange passes on to farmers, who benefit from being able to sell their wheat at the highest prices prevailing in international markets.

“Pricing is transparent, based on a world perspective,” Bollman said.the AGOA pact was a brainchild of former U.S. president Bill Clinton. It is subject to periodical renewal by congress, and the current mandate is set to expire in 2015.

Carson said African countries have the opportunity to push for renewal of the trade law through their government diplomatic officials.

Carson explained that African countries had by and large failed to take advantage of the US law and in the process passed up an opportunity to increase their competitive edge. Africa accounts for less than two per cent of the global trade and commerce,

Source: Compassnews Nigeria   Image: Compassnews

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