Premium Bread-makers Association of Nigeria (PBAN), has decried the high cost of production materials, particularly the high cost of flour, a major component in baking.
PBAN, which described this as one of the major challenges plaguing the industry, therefore called for government’s intervention to avoid its imminent collapse.
Addressing journalists at a news conference recently, in Lagos, the President, PBAN, Tosan Jemid, said the price of flour between 2015 and now, had risen from N6,500 per 50kg bag to N11,500 with the possibility of further increases.
He noted that the prices of other baking ingredients had also increased during this period, and in some cases rose more than five times the original costs, but without a corresponding increase in prices of premium bread by members.
“As an Association, it is either we do something about the increases in the prices of baking ingredients or we won’t thrive. Most of us got loans with double-digit interest rates from financial institutions to fund our bakery projects, and are finding it extremely difficult to meet our loan repayment obligations,” he added.
Jemid further disclosed that the Federal Government on July 20, 2012, introduced a 15 per cent levy on wheat grain imports, resulting in an increase in duty from five to 20 per cent.
“The levy was meant for the development of wheat cultivation in Nigeria, but six years after the introduction of the levy, the effect has not been seen, as wheat cultivation has not increased in Nigeria,” he noted.
Consequently, PBAN urged the Government to also review downward the 15 per cent levy on imported wheat grain, to help drive down the price of flour, which constitute about 75 per cent of baking ingredients. “Our bakeries suffer seriously due to epileptic power supply and the high cost of alternative energy has made it a no-go area for us.
Diesel generators power almost all our baking machines. The cost of diesel has hit the roofs, and is almost out of our reach, and this has led to the closure of some premium bakeries.”
Jemid argued that the industry contributes significantly to job creation, food security, and economic growth in Nigeria, and should be supported by government and financial institutions to remain sustainable, by granting bakers access to low interest loan.He however requested that the government take proactive measures to help sustain the industry as it strives to excel in its role food security.
Source: G Business