[b] How Dangote Became Rice Farmer

Olukayode Oyeleye

— Aug 14, 2014 | Leave a comment

Dangote is now a rice farmer. The road to that was paved with the determination to make a positive difference as exemplified in the MoU signed on August 1, 2014 at the presidential villa, between Dangote Group and Federal Ministry of Agriculture and Rural Development. Aliko Dangote, president of Dangote Group, before the signing, made some elaborate statements that the public would find useful. First, it would appear his company has done its proper feasibility study before taking what appeared to be a ‘plunge’ into the business of rice production.

Let us start with his observation and industry perspective wherein he said: “We need to really support the government. Government is not in business. Their only real business is only to facilitate. They have facilitated. We the entrepreneurs have to take the risk. Anything you do in life is a risk. This one is a calculated risk. I think, for us as Dangote, it will help to bring in other people who have been shying away.”

Dangote expressed some worries, bordering on policies, which formed part of his decision to go headlong into rice farming. According to him, “2020 is like tomorrow. By 2020, in five years, the population of Nigeria will be over 200 million. So, if we are going to be over 200 million people, how do you really feed 200 million? Not even feeding (alone), even if you have to import and we don’t want to create jobs here, how do you keep these ports to be handling the kind of food that we will be eating? It is not just going to happen. We are going to get stuck one day. I think what we are doing now is with the support of His Excellency, Mr. President, and his ministers here.”

Although Dangote posited that “it is not government’s work now to go into agriculture, he, however, added that that “they are facilitating by giving us all the support which is there in our MoU, and also the encouragement, because if the country is open to dumping, that is something totally different.” He added a patriotic flavour by saying that, “with the new rice policy in place, signed by His Excellency, Mr. President, I think it is only people who are not really serious, who are always trying to just milk the system that will continue to import rice.” He assured Mr. President that, as investment in rice production grows, the private sector operators will be at the forefront in the battle against smuggling.

He wanted to start small at first, but had to raise his scale of investment, seeing the open window of opportunity offered by the federal government’s rice policy. Here’s what he said: “Initially, we wanted to do about $300 million in one area, which is Edo State,” but realising the opportunity to expand the project, he noted that “we have ended up with about five states. The five states are Kebbi, Katsina, Jigawa, Edo and Kwara. What we are trying to do is to join hands with the ministry.”

Dangote’s observation exemplified that of an investor who has spotted the sagacity in government’s policy on rice as he pointed out that, “apart from making Nigeria self- sufficient in rice,” it will also “make sure that Nigeria exports rice because we have no reason not to export rice.” He disclosed that “the real reason why we want to move into agriculture is that the perception is that there is no money in agriculture. That is the perception also in the industry. People say no, I am not going to try. There are so many people before, there are several of them that have tried industry and have failed.”

He was quick to add that “that was then, especially during the military regime when the policies were not consistent. But right now, there is a policy of government.” He emphasised that “government does not just go and announce and say that ‘go and do this’ without a policy backing what they’ve said. That has actually helped to make sure that, yes, instead of us to go slowly, with $300 million investment we decided we were going to go and invest a billion dollars.”

Comparing, Dangote noted that “everybody is quite happy that Nigeria is selling a lot of crude oil and mineral resources.” But, he was worried that “it will be very shameful for the biggest economy in Africa that is not self-sufficient in what to consume.” In his observation, “it is not only the duty of the government to make sure that we become self- sufficient. Governments have already done their bit by giving the seeds in the sense that they have given what it takes for somebody to invest. They’ve given the climate. First of all you have the water, and then you have the support by government to protect your investment. Unless you are not serious, I see no reason why we should not partner with government to make things like these a reality.”

Looking at the implications for the sub-region, Dangote warned that “we need to be very, very careful in West Africa, because, in Africa, the tastes of the people are changing. Nobody wants to now go and eat the kind of food we used to eat 30 years ago. Everybody wants to eat rice. As soon as you have disposable income, you want to jump and eat rice.” On the positive sense, he was of the opinion that “this is going to help quite a lot to generate hundreds of thousands of jobs and even through the value chains.”

Recalling his earlier experiences in the cement industry, Dangote said: I have seen it happen before, and I can assure you the rice thing will become a very, very big story. There are quite a few things that we need to try first and see that they work. Number one is in the non-food sector, so that people will know that, sometimes when you say you are going to eliminate the importation of food items, majority of people will believe that this is not possible.”

He gave an example: “In 2002, there was a policy that Nigeria will start importing cement. The total production as at December (2003) to January 2004, was 1.8 million tons. By ten years, when the policy was in place, we were to make sure that cement was self-sufficient here. Today, the total production of the country is 28 million tons. We have moved from 1.8 million tons to 28 million tons. This August alone, we are adding additional nine million tons. We will get to 37 million tons all within ten years.”

From cement, he moved on to the story of his foray into sugar. “We are able to also demonstrate and remove the fear that agriculture is a poor man’s business. It is not,” he argued, adding that, in it, “there is quite a lot of money. I used to tell a lot of people that, eight years ago, when we used to import sugar, we were importing sugar at about 143 dollars into Nigeria. One hundred and forty three dollars into Nigeria will not really allow you to make money at all. But, last year and a half or so, alone we have imported sugar at a thousand dollars a ton or so. So can you imagine! Our people are not looking at these issues because people are not projecting what is going on.”

According to Dangote, “doing farming, doing rice, is by far much easier and also cheaper than cement, because, for cement, to even build a factory, to go through the design, you need four years to be able to deliver, that is if you are going to deliver at all. But, you see, the impact on the society, there is no comparison.” He wears the shoes, so he should know how and where they pinch. So, his words need to be taken seriously.

He was quick to disclose his business strategy as he pointed out that, “what we are trying to do is not only to just make sure that we do end-to-end, or do almost everything. We will try to make sure that we have out growers. We will give them the seeds. We will give them the training. We will give them fertiliser. And then we guarantee to buy their paddy, and process. That is on one side. Even, people who are not around our areas, when they grow the rice, we will definitely continue to support them to buy paddy off from them and then process the rice into an eatable processed rice, because if you don’t continue to encourage them, they are not going to grow rice the following year.”

Dangote has identified rice production as capable of bringing about social harmony and security. In his words, “this will also reduce a lot of tension. It will also reduce quite a lot of this unemployment, because there are a lot people that have finished universities and they don’t have employment. But agriculture is a chain of several other disciplines of jobs.” He envisaged that Dangote Industries’ investment will create various opportunities. That, with rice, “we will be able to create” jobs, he explained, “even if you don’t want to go and work you could become a trader. The rice is there. It will become cheaper. It will conserve our foreign exchange.”

Dangote’s advice for the nation was that “the most critical thing (is), it is not good to have a GDP of seven per cent and not be inclusive.” He regarded rice as “part of the things that will make it inclusive in terms of GDP, as he expressed optimism that, “if we sort out power and agriculture, these two alone will make Nigeria’s GDP to be growing in double digits on yearly basis.” [/b]

http://leadership.ng/business/380950/dangote-became-rice-farmer

This is a very good development

Dangote Means Business

That is my kind of Leader. He gives hope to people like me who are aiming to created wealth through agribusiness.
You are right on course. Imagine where our national progress on attaining capacity would be like if there is no bokoharam in the Northeast.

I hope my Niger Delta brothers would see this, and realise thats it's not all about wearing starched and big expensive cloths, nor fighting over APC and PDP. Tomorrow them go go say aboki no get sense but they are doing their thing underground and amassing wealth for themselves with there head and connection.