Thursday, February 23, 2016 10:03AM /Dangote Group
The Policy Research Centre, (PRC) an advocacy group, in one of its recent public advocacy quoted Shoprite CEO, Whitey Basson as saying “the Seven Nigerian stores we already have sold more Moet Champagne than all our South African Stores combined”. The Centre went further to say that the Shoprite Chief executive’s declaration apparently did not mean anything bad about Nigeria. “Indeed, he might have meant it as a compliment to the huge potential of Nigerian market”, the PRC stated.
However, hidden in that statement is his expression of undiluted appetite of Nigerians for foreign things. The Centre went further to say that the Shoprite CEO assertion only revealed the problem with Nigerians; wasting precious foreign exchange on luxury goods, thus putting undue pressure on the foreign reserves.
Between 2005 and 2015, Nigeria’s monthly import bill went up from N148 billion to N917 billion. Paradoxically, most of the items Nigerians import are needless items and things that could be produced locally. The crash of the crude oil price which, has remained the main foreign exchange earner for the nation, has laid bare the helplessness of Nigeria as a monolithic import dependent economy.
With the oil not able to sustain the economy anymore, the attention expectedly is shifting to agriculture which decades ago was the propeller of the then buoyant economy. This is one of the reasons the seasoned business man and President of the pan African Conglomerate, Dangote Group, Alhaji Aliko Dangote made a foray into productive agriculture. Last week he launched his Dangote Rice Outgrowers Scheme in Hadejia, Kafin-Hausa local government area of Jigawa state.
Starting with 20,000 hectares of rice cultivation under scheme known as outgrowers, to be expanded to cover 800, 000 hectares over the next three years, Dangote said time is now to turn to agriculture to save the nation’s economy.
The business mogul commenced the scheme with the distribution of treated rice seedling for planting to some 5000 farmers expected to participate in the scheme.
He explained “We are committed to the development of Outgrower scheme by providing local, value added products and services that meet the 'basic needs' of the populace. To this end, the Dangote Rice Farm Ltd, will run an initial pilot in Hago-Fadama, Kafin Hausa and Auyo areas which would see Dangote Rice developing small hold farmers by providing quality inputs (certified seeds, fertilizers, agro-chemicals and petrol), improved agricultural practices and technology to increase yield and produce quality rice paddy which would also be bought back from them by Dangote Rice Limited. The Outgrower programme in Jigawa state is expected to create more than 10,000 direct and indirect jobs to the host communities.”
Over the period, aside the outgrowers aspect of the investment, he explained, Dangote Rice is planning to plant approximately 150,000ha of long grain white rice and produce near one million tons of high quality par boiled white rice for sale into the Nigerian market.
“Our internal policy within Dangote Rice Ltd is to procure 30% of our Rice production from local farmers who will be developed into outgrower groups. These Outgrowers will be simultaneously developed alongside our commercial farming operations.”
Dangote said "Before the discovery of oil, our economic was built around potentials from our palm oil, groundnut, cotton, and rubber plantations. Now the price of oil has plummeted from a peak of $116 per barrel in June 2014 to as low as $29 per barrel in January 2016, this means there is huge loss of revenue to the government". Dangote said Nigerian agricultural commodities and food imports bills has averaged over One Trillion Naira in the past two years in 2013 and 2014, with foods like sugar, wheat, rice, fish accounting for 93 per cent of the total cost of imports, a situation he described as unacceptable for anyone who loves the country.
He justified his investment in rice cultivation pointing out the situation the country has found itself needs a reversal. According to him, Nigeria spends nearly $1.8bn per annum importing approximately 3.2 million MT of rice to feed its population. These are dollars that could be used on more impactful social development interventions if they were not needed for food imports.
Currently the average yield of rice in the country is between 1.8 to 2.5 MT/ha, depending on the region and the crop (wet or dry) and with or without irrigation 1.8 MT/ha, which is significantly lower than the best practice yields in Africa of 9.2 MT/ha generated in Egypt. Locally produced rice is more expensive than imported rice due to the high cost of production relative to the low yields in the country because of poor agronomic practices. In addition the Government of Nigeria has implemented policy incentives that encourage investment in domestic rice production and milling.
He regretted that the huge amounts were being expended on food items that the country has potential to produce locally with attendant losses of employment generation and wealth creation opportunities. "Yet the allocation of foreign exchange to import these items depleted the foreign reserves continually."
Dangote disclosed that the Dangote Rice Outgrowers Scheme has been designed as a one stop solution for the rice value chain.
In his remark during the rice seedling distribution, Minister of state for Agriculture, Senator HeneikenLokpobiri lauded the initiative of Alhaji Dangote, saying hi intervention in the government efforts at providing food security for the citizenry, creating jobs and reducing dependency on food importation are being boosted.
According to him, a whooping sum of $the D20 billion is spent on importation of food items that could be produced locally, a situation he said Dangote Rice investments would help reduce
While expressing the government readiness to provide all the needed support to make the Dangote Rice Outgrowers Scheme a success, the Minister said the government is putting in place a strategy that will make farmers have greater access to farm implements to help them produce with ease.
Also speaking the Special Adviser to Alhaji Dangote on Rice and Coordinator of the Outgrowers Scheme, Mr. Lulu Carlos explained that 6.1mmt of rice is consumed annually but not more than 2.6 million metric tons are produced locally leaving the rest to importation.
Lulu said: “We are happy to start today the partnership with the 1st Out Growers bloc of 200 hectares, shared among 8 communities. I've seen the same project born in my country, Brazil, whereby from 2.5 Mt tons in the beginning to today where we reached 9 tons of paddy rice per hectare in productivity.
“This has transformed our country (Brazil), from a net importer of Rice in the year 2000 to a net exporter in the year of 2009. This was achieved through a big out grower scheme in the rice region, which, today involves thousands of independent farmers responsible for 80% of the 12 million tons locally produced rice and a small number of large Commercial farms supplying the remaining 20%.
“Also, Alhaji Aliko, has instructed me to conduct the project here for at least 30% from out growers and 70% from our commercial farm to be established in the state. But this is not our limit. We are today convinced that this equation will have more and more out growers participation in the future, due to very good and welcome response we are getting from all the communities we are dealing with.
“We are bringing to the people top quality seeds, fertilizers and chemicals as well the training and teaching the best and most modern agricultural practices, to enable you to boost your productivity and quality of your rice. We are also committed to roll out the scheme to cover another 1,000 hectares for the coming rainy season in June / July, using the experience of this 1st plot to guide our progress.”
The Jigawa State governor, Alhaji Badaru Muhammed Abubakar thanked the Dangote Rice Limited for choosing Jigawa as the pilot state for the project. He pledged the readiness of his administration to provide all necessary support to the project.
He said, the project was part of his government’s commitment to improve agriculture and industrialize the state for job creation and poverty eradication. “Right from my inaugural speech, I made it clear that, agriculture was one of my government cardinal points and we are ready to collaborate with private investors in achieving the desire goals.
“The project we are launching today is one of the numerous projects we intend to embark in collaboration with private investors from within and outside the country, and we have already signed memorandum with many of them,” the governor said.
The governor then assured Dangote Group of the state government’s support in making any policy and intervention that will make the investment profitable and generate jobs for the teeming population of the state.