Nigeria

    Since the early 1950’s when commercial gum Arabic trade started in Nigeria in a small scale, Nigeria has remained a major player in the global gum Arabic business. It was the second most important gum Arabic source after Sudan until Chad became active in the business of gum Arabic in the 1990’s.

   However, since the commencement of significant commercial activity in this business, the growth rate of under 10% has not been very encouraging compared to the growth rate in Chad which averaged about 25% in the last five years. Grown within over 250,000 sq km and involving over 3 million people living within the Sahel region of Nigeria, gum Arabic has a major economic status in the semi desert northern part of Nigeria. Its importance became more pronounced since the decline of petroleum and gas revenue in Nigeria in the eighties.

     The gum Arabic industry in Nigeria is private sector driven, but has substantial Government support. The National Association of Gum Arabic Producers, Processors and Exporters of Nigeria (NAGAPPEN) which is made up of stakeholders in the gum Arabic business up to the village levels is the engine driving the industry from the private sector. The Federal Ministry of Commerce, The Federal Ministry of Agriculture, and the Federal Ministry of Environment anchor the industry from the Government side at the Federal level. 

    Several plantations of gum Arabic are at various stages of implementation by the local, State and Federal Governments and by private sector companies. The Federal Ministry of Commerce is backing the commercial and industrial aspects of the gum Arabic business with various incentives.  

   The result is that Nigeria currently has the only private sector functional spray dry gum Arabic processing facility in Africa with a capacity of 15mts per day of spray dry gum Arabic. If the current development programmes in this sector are sustained, at the various levels of Government and private sector participations, Nigeria will no doubt remain in its position as the second world largest producer of gum Arabic, in the years ahead.

     Nigeria is a country with a huge population and high potential for internal gum Arabic consumption. She has robust and dynamic entrepreneurs as well as huge financial potentials. Businessmen from Nigeria have significant activity in gum Arabic business in other countries, including Chad and Niger Republic. The country therefore, has the potential of taking the gum Arabic business in Africa to very high levels within the shortest possible time.

     Nigeria’s gum Arabic production covers the entire Sahel Region, in Nigeria of over 250,000 sq km, which cut across fourteen states of the 36 States of Nigeria. The gum Arabic trees are wild with less than 4,000 hectares of organized farms and parks. Large sections of the land are communally owned and controlled by traditional rulers. The gums are therefore, harvested by farmers and nomads with token payments to the Traditional Rulers and or Local/State Government authorities. The size of Nigerian gum 30 Arabic resource is unknown but Foresters believe that less than 40% of the resource is tapped. 

    Before the 1980’s, no importance was attached to gum Arabic. The trees were therefore, largely cut for use as fossil fuel. The low producer price and long distance from community dwellings to areas of gum Arabic farms also made it uneconomical to harvest the gums. Nigerians therefore have a culture of cutting gum Arabic trees for fuel purposes; a culture which needs to be addressed through enlightenment campaigns.

    Like in Chad, data on the production of gum Arabic in Nigeria is scanty and not too accurate. However, information from the Nigeria Ports Authority and a Commodity consulting company, Commodity Networks Limited, provide a very good guide to the production and marketing information on Gum Arabic in Nigeria.

    Since Nigeria’s export data is hardly posted to the International Trade Centre, (ITC), statistics provided by ITC on Nigeria is grossly misleading, incomplete and incorrect. Furthermore, production and export trade data generated by ITC on Nigeria does not usually contain shipment data to India which buys over 50% of Nigeria’s gum Arabic.

     Table and Figure show the steady growth in the production of gum Arabic in Nigeria. An analysis of the data indicates that the production of gum Arabic in Nigeria has been growing at an average annual rate of 9.5% since 1998. Given the massive plantation projects presently going on in Nigeria, the enlightenment campaigns at the farmer’s level, and the high producer prices of gum Arabic in Nigeria, the very encouraging Government interest and participation in the industry, the production of gum Arabic in Nigeria can only increase in the years ahead.

TABLE . Production (Export) of Gum Arabic in Nigeria, 1994-2003.

SOURCE:

Total 1. Commodities Networks Limited.

Total 2. Nigerian Ports Authority.

                                                               Figure : Production (Export) of Gum Arabic in Nigeria, 1998-2003

     Data is not available on the size of the gum Arabic resource in Nigeria. However, Foresters in the fourteen states producing gum Arabic in Nigeria estimate that only about 40% of Nigeria’s gum Arabic is being utilized. With the present level of production of about 17,000mts, it means Nigeria has an estimated potential to produce about 42,500mts of gum Arabic at full capacity. 

    However, plans are at various stages for the cultivation of over 30,000 hectares of land in various states of Nigeria with gum Arabic. Researchers in various Universities and Institutions are working on various aspects of gum Arabic while enlightenment campaigns are going on for tree preservation. The combined effect is that the production of gum Arabic in Nigeria is likely to increase quite substantially over its present level in the next five years.

     Nigeria is a free and very dynamic economy. The average Nigerian farmer is also very well informed. Producer prices of gum Arabic in Nigeria is the highest in the region. On the average producer prices account for about 55%-60% of the export price of gum Arabic. The analysis of a typical export price of Nigerian Gum is as shown in Table 12.

 Table . Analyses of Typical Export Price of Nigeria Grade 2 Gum Arabic in 2003.

EXPORT PRICE (AVERAGE)/PMT (FOB) $750

      The high level of the producer price in Nigeria has been supportive of the production of gum arabic in the country. The level will continue to remain strong as the gum market becomes even more open and farmers get more enlightened.

     Until recently, (2003) all the gum Arabic produced in Nigeria was exported in their raw forms. In the last 15 years, there is no year in which there is any stock of unsold gum Arabic in Nigeria. This means that the production figures (Table 11) are same as export figures.

    There are over fifteen companies exporting gum Arabic from Nigeria, out of which ten are foreign companies, while five are indigenous companies as at 2003. Nigeria’s principal trading partners in gum Arabic include: India, France, Germany, United States of America, Belgium China and Britain.

     Over 50% of Nigeria’s gum Arabic is exported to India. Indian buyers claim that the colour of Nigerian A. seyal is superior to the colors of A. seyal produced from any other country. Indian buyers are therefore willing to pay up to 10% premium for Nigerian A. seyal over the price paid for A. seyal produced in any other country. India buys A. seyal from other countries only when Nigeria is unable to satisfy their demand.

Nigerian gum Arabic is marketed in four major grades namely:

♦ Grade 1 (A. Senegal)

♦ Grade 2 (A. Seyal)

♦ Grade 2 Special (A. polyacanta).

♦ Grade 3 (Combretum).

TABLE . Typical Average FOB Export Prices of Various Grades of Gum Arabic in 2003 &

2004

SOURCE: Commodities Networks Limited.

*2003 Represents a year of normal production.

** 2004 Represents a year of scarcity and short supply of Gum Arabic in the international market.

   With the improved quality of Nigerian gum Arabic and worldwide acceptability, the demand for Nigerian Gum will continue to increase in the years to come.

    The local market for Nigerian gum Arabic revolves around three market segments.

Traditional Users: One major use of gum Arabic is in its consumption (in its raw form), as a food supplement to build body immunity, especially in pregnant women and to prevent dysentery. It is also used as a deodorizer to neutralize odors, as well as incense in churches and mosques to drive away evil spirit and witches.

Home Industries: Gum Arabic is an essential sizing agent in the production and dry cleaning of traditional head caps worn by almost all tribes living in the northern part of Nigeria. Statistics on the consumption of gum Arabic in this industry is not available but local people interviewed confirm that the usage of gum Arabic in this industry is quite substantial.

  Another home industry where gum Arabic is used is in the production of ink (local name is Adaa) for Arabic writing. Gum Arabic is also used as an additive in the production of Honey for local sales. It is believed to give the honey more stability and greater viscosity. 

Industrial Uses: Several multinational companies operating in Nigeria use processed gum Arabic in one form or the other. Companies such as Cadbury, Coca Cola, and numerous pharmaceutical and confectionary companies are among the many local industrial users of gum Arabic in Nigeria. However, these companies do not use gum Arabic in its raw form nor do they agree to buy gum Arabic from the spray dry plant in Nigeria.

       Nigeria has a spray dry gum Arabic processing plant in Kano with a capacity of 15mts per day. The plant had technical and marketing problems at inception, but has overcome all these and is now fully booked all year round since 2003. The company produces seven brands of spray dry gum Arabic, ranging from Super White to Normal White.

     Two other gum Arabic processing plants are at various stages of implementation in Jigawa and Borno States.