I once had the pleasure of being in a room with Nigerian Multimillionaires, they were discussing investments, i listened.
The Nigerian millionaires were having a business discussion with a Mexican from the SanCarlos Company, the discussion was actually the Mexican selling agriculture as a business to the Nigerians . The Mexican from the SanCarlos Corporation invested in a pineapple farm in Enugu, and now exports pineapples from Nigeria. The Mexican explained to the Nigerians that Nigeria enjoys excellent trade terms with Europe and the US, SanCarlos Pineapples are “Nigerian” thus allow them enter the EU under those trade terms…
The Nigerian millionaires were not convinced
The Mexican went on, he was making good volume exports from Enugu, his dollar cost were lower in Nigeria than Mexico, he exports and earns same dollar per tonne for Pineapple.
The Nigerian millionaires were not convinced
The Mexican moved unto Tomatoes, local demand for tomatoes was constant in Nigeria, but supply of tomatoes was seasonal, any investor could set up greenhouses and supply tomatoes all year round locally, great opportunity.
The Nigerian millionaires were not convinced
Carlos continued, “ok , i will make a deal with you all, invest in tomatoes, i guarantee i will buy up all your output”..
The Nigerian millionaires were not convinced
The Mexican got an A for effort but he was facing a tough crowd.
The Executive Secretary, Agricultural Research Council of Nigeria, ARCN, Prof. Baba Abubakar, said Nigeria is the largest importer of US hard red and white wheat worth N635 billion annually; world’s number 2 importer of rice at N356 billion; These imports are established opportunities. lets explore them in detail.
Wheat. Nigeria largest wheat miller is Flour Mills of Nigeria founded in September 1960, who owns Flour Mills? The Excelsior Shipping Company Limited, registered in Liberia. The beneficial owner of Excelsior Shipping Company is a trust established by the late Mr. John S. Coumantarosere a US citizen.
Who is in second place? Olam of Singapore has bought BUA flour milling assets, making her Nigeria’s number two wheat miller by sales volume.
Let go to Rice, Where is the Largest Rice Mill in Africa? its in Kebbi State its called the WACOT Rice Mill in Argungu, its a gigantic 120,000 metric ton capacity mill, who owns the mill? TGI Group, a European concern…
Where is the second largest Rice Mill in Africa? its also on Nigeria, in Nassarawa, its called Olam Rice Mill, who owns it? Olam Group based in Singapore..
Rice is Nigeria’s single largest food import, according to the BBC Nigeria in 2016 had a rice demand of 2.3m tonnes, and imported 2.3m tonnes or rice. Nigeria spends $5m or N1b day to import rice. Yet, the largest Rice millers in Nigeria are from Europe and Singapore.
What about Palm Oil? The Niger Delta was named the Oil Delta, not because of crude oil but Palm Oil, Nigeria largest Oil Palm oil refinary is the Presco Plc. (Presco is investing $30m in a palm oil refrinary) who owns Presco? SIAT or Société d’Investissement pour l’Agriculture Tropicale”, a Belgian company. .
I must commend these foreign investors for coming to Nigeria and actually investing in the real sector, Agriculture is a long, slow and profits are not guaranteed. The WACOT Rice Mill costs N10b. If the owners invested their funds in “risk free” Federal Government Bonds, they will make N1.3b every year, tax free, risk free. yet they are investing in a rice mill while Nigerian millionaires are looking for marginal oil field licenses.
Why are Nigerian High Networth Individuals not interested in the business of Agriculture?
in 2006 the Obasanjo Government created a “Private” company called Transcorp. Obasanjo said that one of the reasons for the establishment of Transcorp was the need for a “functional platform for the projection of the nation’s economic potentials.” Transcorp was designed to provide the vehicle that Nigeria needs to mobilise capital on a very large scale for investment in projects that had hitherto been the exclusive preserve of foreign investors.”
Transcorp was Nigeria response to foreign multinationals. its was modelled after the South Korean Chaebols, great move. In its first full year of operation, Transcorp has acquired the NICON Hilton Hotel in Abuja. Bureau of Public Enterprises put Transcorp for the acquisition of Nigerian Telecommunications Plc (NITEL), the Port Harcourt Refinery and the National Clearing and Forwarding Agency. Transcorp also designed an entry plan for participation in the development of strategic oil blocks.
Notice anything? Transcop in its early days had no agriculture portfolio ( it does now)
So when the Federal Government, with the backing of the President decided to pool Nigerian billionaires and invest in the Nigerian economy, no one bothered to invest in a Rice or Wheat farm, thats telling.
There are more Nigerian millionaires with filling stations and shopping malls that rice mill, More Private jets are owned by Nigerian Millionaires than oil palm plantations.
Why?
I believe its a perception issue. Agriculture is viewed in Nigeria as rain-fed hard work, rural, and not as a business. There are not just enough success stories at the local level to encourage Nigeria best and brightest students to go and study agriculture and apply modern techniques to grow, store, process and distribute food.
Football and Entertainment in the past were viewed as professions for those that failed from white collar jobs in Medicine and Law, today, these are sought after professions why? because of local success stories.
Unless the mindset is changed, and agriculture cn attract Nigeria best and brightest, Nigeria will continue to export Cocoa and Import Chocolate.
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