Connect with us
nairametrics

Business

Why Dangote’s failed paste factory should give Buhari more headaches than Dangote

Published

on

For all intent and purposes, it looked like the perfect scenario- a multi-billionaire native industrialist coming in to invest several millions of dollars in order to produce a commodity that the country was spending billions of Naira importing at a time when the forex crunch was at its hardest. This fairy tale stayed at just that- a fairy tale- for the state-of-the-art, billion-Naira Dangote tomato paste constructed in Kano Nigeria. For many, and probably most important for the Federal Government, that plant was supposed to save the country 400,000 tons of tomato paste imports annually and millions, if not billions of dollars. Unfortunately, the plant lies idle with several attempts to resuscitate it failing.

For Aliko Dangote, owner of the plant and Africa’s richest man, the greatest dent is probably to his ego as a businessman. For someone used to success, this blip could be irritating. In financial terms, though, the N4 billion or $12.74 million investment sitting idle is unlikely to cause any sleepless nights for a man whose cement business alone posted revenues worth N615 billion in 2016. And in any case, he has made arrangements to get his raw material himself, so the plant will work. It’s just a matter of when.

For the Muhammadu Buhari-led administration, this is another story entirely. One of the President’s mantras has been “We must produce what we eat.” Unfortunately, so far, his administration has failed at solving the problems that plague the agricultural sector. To make matters worse, this is coming at a time when oil prices have dipped significantly, effectively shrinking the government’s revenue as oil exports are responsible for over 70% over government revenue. As a result, the FG emphasized on diversifying the economy with agriculture voted as one of the most promising substitutes. So far, agriculture has not lived up to its billing.

This is not to say that the Buhari administration has not done anything in this regard. To encourage agriculture investments like the Dangote plant, the government has waived duties for greenhouse and processing equipment. Rice farmers, and very soon, tomato farmers benefit from subsidies from the FG. Despite these attempts, hardcore problems continue to hamper the rise of agriculture as a substitute for oil.

Take the tomato paste issue as an example. Nigeria produces a whopping 1.5 million tons of tomatoes annually. About half of what is produced, 750,000 tons of that is wasted each year. Given that Dangote’s plant can run a full capacity of 1,200 tons a day, the wasted tomatoes in Nigeria in one year can keep Dangote’s plant busy for 625 days or 21 months.

GTBank 728 x 90

Yet, bad roads, erratic power supply and an obsession with producing oil are results of decades of endemic corruption where government has focused on what can bring in money for its members rather than infrastructural development. This has also affected agricultural practices. Low quality seed, scarce irrigation services, lack of storage facilities and the ever-greedy middle men are other problems that the FG need to tackle if agriculture is to take a central position in country’s economy.

If not, there is trouble on the horizon for the FG. There are not many other investors apart Aliko Dangote, if any at all, that can afford to keep workers on a N5 million per month wage bill for doing nothing while their investment remains idle. Already, another tomato factory in Lagos threw in the towel in November 2016, unable to import tomatoes due to a lack of hard currency as Nigeria struggles with recession. Investment, job creation, forex conservation and self-sufficiency will all continue to be dreams if investors continue haring stories like these. Oil will continue to reign supreme and diversification will go down as another fantasy of the Buhari administration.

Chacha Wabara-Ogbobine is a Legal practitioner with over 9years post call experience. A research Consultant, professional writer and a blogger at heart,owner of four thriving websites with well over 10years of experience. Totally in love with keeping fit and coaching weight loss enthusiasts. I love my quiet time, being with my kids, watching TV series for hours on end.

1 Comment

1 Comment

  1. Pingback: "Why Dangote’s Failed Paste Factory Should Give Buhari More Headache Than Dangote" - Socializee

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

Lagos shuts 3 container terminals, hotel in Amuwo Odofin, seals 17 buildings in Lekki

The government has moved to seal illegal terminals and unapproved structures in the state.

Published

on

Lagos issues ultimatum to Tank Farm Operators over planning permit, Lagos seals 27 residential and commercial buildings in Lekki, LASG Seals 19 more Buildings in Banana Island over planning permit

The Lagos State Government has moved to stop activities of the illegal container terminals with the sealing up of 3 illegal locations along Festac Link Bridge, Amuwo Odofin. This also includes the one used for batching sand underneath the bridge, among others.

The state government, in its continued clampdown on illegal structure, sealed off 17 buildings at Oniru Estate, Lekki and several others along Oniru Beach. It also sealed the Festival Hotel and a 9-floor serviced apartment illegally renovated in Amuwo Odofin.

This disclosure was made by the Lagos State Commissioner for Physical Planning and Urban Development, Dr. Idris Salako, while supervising the sealing off of the facilities, in the company of the Special Adviser to the Governor on Urban Development, Ganiyu Adele Ayuba, and Permanent Secretary of the ministry, Arc. Foluso Dipe.

Salako noted that the existence of container terminals and docks must be controlled in order to forestall abuse of the physical environment and ensure environmental sustainability.

He explained that the container terminals, some of which also operated unapproved docks, are located indiscriminately in apparent contravention of the Lagos State Urban and Regional Planning Law 2019 which stipulates that prospective developers must obtain Planning Information and Planning Permit as necessary conditions for locating such facilities.

GTBank 728 x 90

While ordering the removal of the container trucks along Festac-Mile 2 link-bridge, the Commissioner said that the State Government would not condone the existence of illegal terminals or similar facilities across the metropolis in view of their impacts on the infrastructure and natural resources of the State.

Salako urged anyone interested in setting up such facilities to approach the Ministry of Physical Planning and Urban Development for Planning Information, which would give informed advice on approvable locations, and also obtain a Planning Permit from the Lagos State Physical Planning Permit Authority (LASPPPA).

Continue Reading

Business

Fire guts fuel tanker, vehicles at Anthony, Lagos

The tanker conveying PMS lost control while in motion and subsequently fell sideways.

Published

on

NNPC reacts to Lagos pipeline explosion

There is a fire outbreak, which has gutted a fuel tanker, at Anthony inward Gbagada, Lagos State.

This was disclosed by the Federal Fire Service via its Twitter handle on Friday evening. The incident, which occurred around 10 pm, has razed at least two vehicles.

The agency urged road users to avoid the area and take alternative routes.

Also, the Director-General of the Lagos State Emergency Agency, Dr Olufemi Oke-Osanyintolu, confirmed the incident.

GTBank 728 x 90

He said, “The Agency responded to distress calls and upon arrival at the scene of incident, it was discovered that a tanker with unknown registration number conveying PMS lost control while in motion and subsequently fell sideways.

“This led to an explosion in which two unidentified vehicles were burnt.”

A joint team of responders led by the Federal Fire Service, LASEMA, LASG fire service, LRU fire unit, Nigeria Police and LASTMA are working together to curb the inferno from escalating further.

Details soon …

Continue Reading

Business

Nigeria among countries to be worst hit by food crisis globally

Nigeria, others were listed as countries with the worst deteriorations in acute hunger in recent months.

Published

on

7 million Nigerians to experience food shortage

Nigeria has emerged as one of the countries to be most hit by food crisis across the globe in the face of the coronavirus pandemic which had worsened the already bad situation.

This disclosure is contained in a report by the United Nation’s Food and Agriculture Organization (FAO).

The report from the FAO also shows that the Democratic Republic of Congo is emerging as the country with the world’s largest food crisis in terms of absolute numbers, with Burkina Faso listed as the country with the worst deteriorations in acute hunger in recent months.

The food crisis is made worse in Nigeria by the longstanding religious and ethnic conflicts and even organized crimes by some bandits, which has greatly affected farmers working on their farmlands.

In addition to these, the farmers were already contending with the issue of flooding or drought, which has negatively been impacting on the agricultural sector in a period the country is desperate and very desirous of economic diversification. The coronavirus pandemic has triggered a surge in food prices as can be seen in the reports released by the National Bureau of Statistics (NBS), in a country that imports over 10% of its food supply.

GTBank 728 x 90

With a population of over 200 million people, Nigeria is the most populous country in Africa, which is regarded as the world’s most food-insecure continent. This is made worse as importers of food items struggle to gain access to dollars for their imports due to scarcity of foreign exchange which is triggered by the crash of oil prices and low foreign inflow.

This is expected to be exacerbated by the recent order by President Muhammadu Buhari to the Central Bank of Nigeria, to stop the allocation of foreign exchange to importers of food items.

The Governor of Niger State, Abubakar Sani Bello, warned in April, “We are heading toward famine and starvation.”

The FAO report which states that Congo has about 21.8 million people that are acutely food insecure, also points out that Burkina Faso has witnessed an almost 300% uptick in the overall number of people experiencing acute hunger since the start of 2020.

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
deals book
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement