Following the foreign exchange restriction ban on a list of items which includes milk and other dairy products by the Central Bank of Nigeria (CBN), s
Following the foreign exchange restriction ban on a list of items which includes milk and other dairy products by the Central Bank of Nigeria (CBN), supposedly with a view to boosting local production, and investment in ranches the Dangote Group, one of the country’s biggest investment holdings, is changing its strategies regarding group investment in rice and sugarcane production and processing in the country.
This time, the multinational group is considering the N500bn the country spends on dairy products import annually. Last week, the CBN Governor, Godwin Emefiele expressly told operators that milk and other dairy products would be restricted from access to foreign exchange both at the official and parallel markets if they refuse to invest in ranches, a move he said would quell the ongoing farmers-herders crisis. While ranching has become a controversial issue, especially with the Federal Government’s proposed RUGA policy, the bank’s approach could intensify the struggle for land between herders and farmers. Operators might also see the CBN as foisting the policy on them without recourse to an existing business model and the socio-ethnic concerns milk and meat may incite.
“We are also planning to go into dairy farming. As the minister said, we are spending huge sums of money importing powdered milk annually, this is simply unacceptable. So we are going into large-scale dairy farming,” Engr. Mansur Ahmed, the Group Executive Director, Government and Strategic Relations of the group, told his co-investors.
He said the change in strategy had become necessary because of the several issues involved in places where they had acquired land. The group had acquired thousands of hectares across major rice and sugarcane producing belts for production and processing but that plan has changed to only processing.
“To be honest, we initially planned to go into large-scale farming but we found that it is not practicable at the moment. We acquired 12,000 hectares in Jigawa State about four years ago and when we wanted to move in our tech, we found that there are about 15,000 farmers and their families occupying that land and it is simply not possible to move them out of it, so we have to engage these same farmers in an out-growers scheme.
With the new approach, the group is also constructing about six large-scale industrial processing mills, each with about 250,000 tonnes per annum capacity, in six states: Jigawa, Zamfara, Sokoto, Kebbi, Niger, Kano and hopefully in Nasarawa.
“The intention here is to basically create a sort of similar anchor borrower, an arrangement where we engage out-growers,” Engr. Ahmed added.
In Katsina State, the group also acquired the state-owned Songhai project and is establishing tomato production and processing facilities.
“We are also going into tomato processing and we have acquired land in Katsina and the same kind of problem came up, so we don’t have to move anybody. We have started with 4,000 hectares for the tomato,” he said.
