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Achieving Self-sufficiency in Rice Production

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Rice
  • Achieving Self-sufficiency in Rice Production

Jonathan Eze examines the positive impact the commissioning of the WACOT Rice Mill in Kebbi would have on food sufficiency.

The recent commissioning of the WACOT Rice Mill in Argungu, Kebbi State is undoubtedly a major boost to the federal government’s determination supported by the private sector to ensure that enough rice is produced in Nigeria to meet the needs of the country. The WACOT Rice Mill, which is currently the largest in the West African sub-region, has the capacity to produce top-quality rice comparable to imported rice from Thailand and India.

President Muhammadu Buhari, through the Central Bank of Nigeria had launched an Anchor Borrowers Programme for rice and wheat farmers to advance their status from small holder farmers to commercial or large growers in Kebbi state. At the launch in 2015, Buhari expressed optimism that the Programme had a potential of creating millions of jobs and lifting thousands of small holder farmers out of poverty.

Under the programme, CBN had set aside 40 billion Naira out of the N220billion Micro, Small and Medium Enterprise Development Fund (MSMEDF), to be given to farmers at single digit interest rate of maximum nine per cent per annum.

Buhari told the gathering of farmers and some Governors of rice and wheat producing states in Nigeria that the federal government would favour the programme because it squarely aligned with the government’s aspiration to achieve food security for Nigeria.

In line with the federal government food sufficiency goal, acting President, Prof. Yemi Osinbajo recently unveiled the state-of-the-art WACOT Rice Processing Mill in Argungu, Kebbi State.

According to available statistics, about 7million metric tonnes of rice is consumed annually in Nigeria while local production now stands at about 3.9 million metrics tonnes annually leaving a gap of about 3million tonnes. It is however pertinent to mention that local paddy production by Nigerian farmers has increased by about two million metric tonnes in the last two years as a result of the renewed support the farmers are receiving from various private sector organisations.

Speaking at the event, the Group Managing Director of TGI Group, the parent company of WACOT Limited, Mr. Rahul Savara said that the company is empowering farmers through its out growers scheme and that more than 5,000 farmers in the state have benefited from the initiative.

“WACOT has trained about 5,000 farmers on good farming practices. The farmers are engaged on multiple levels such as the field and demonstration farms. We also set up farmers’ business school to teach them financial management, cost of production, and best ways of investing their money.

“We have also worked with a lot of female-led organisations to create self-sustainable groups and make them economically viable.”

On quality, Savara said WACOT Rice Limited has the capacity to produce world class rice that could be compared with those produced in Thailand and India because it has the required machines, boilers and other equipment needed to produce high quality rice.

“We need to change the notion that Nigerian rice is inferior to Thai rice. Our rice has passed through food safety standards and control and we are set to meet our targets.

Commending TGI Group for supporting and investing in the food security vision of the federal government, Osinbajo restated that the federal government will in the next two years concentrate its attention on agriculture and food security, energy, (power and petroleum), industrialisation and transport infrastructure.

He also disclosed that the government will continue to work closely with the private sector, giving them the necessary incentives and creating an enabling environment for them to invest and do business.

“This mill is important for several reasons. First, it underscores the policies of the federal government that it is the private sector that must be the engine of development. The private sector being the engine of development is not just having the sector grow but the growth must be growth with jobs, the development we are talking about is growth with jobs. We have seen a lot of jobless growth in some sector of the economy with a lot of revenue coming in but with very few jobs.

With this Rice Mill, Several thousands of our farmers have been engaged in farming, this is a growth with job and the Group Managing Director has assured that in a couple of years, they expect to have engaged 50,000 more farmers. This is the kind of private sector led growth that we want to see”, Osinbajo added.

Many Nigerians including Buhari have emphasised the need to move the nation away from over-dependence on crude oil. The situation in the international oil market calls for an urgent need to diversify both the productive and revenue base of the nation’s economy and conserve foreign reserve by limiting the importation of goods that could be produced locally.

The plummeted price of crude oil means that there are limited resources available to governments at all levels. Therefore, the diversification of the economy is no longer an option for the nation. It is the only way to reclaim economic momentum and drive to prosperity. The only way to do this is to go back to the land and develop our agricultural production.

If the current momentum is sustained, the economic diversification goal of the Federal government may be achieved in the shortest possible time going by the revelation by Savara that the current phase of the Rice Mill has a production capacity of 120,000 metric tonnes per annum and that the company intends to increase its rice milling capacity in Nigeria to 500,000 metric tonnes per annum in the next few years.

He appreciated the effort of the federal government for its various initiatives in support of agriculture through the CBN and other mediums, which has impacted the growth of the sector positively, and has also served as a motivation for private sector players in the sector.

“Therefore, for us this is just the beginning. We have plans to invest over N100 billion over the next years in various agricultural value chains.”

It is worthy of note that the rice processing plant is the first rice mill to be conceptualised, executed and commissioned during the Buhari administration. The construction of the mill was first announced by the Governor of Kebbi State in November 2015, when Buhari launched the CBN’s Anchor Borrowers Programme in Birnin-Kebbi. Work started on the mill in February 2016 and it has now commenced operations.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

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Petrol - Investors King

Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

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Dangote Refinery to Import First Brazilian Crude Oil Shipment Next Month

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Shipowners

The Dangote Refinery is set to receive its first shipment of Brazilian crude oil next month.

This is a pivotal moment in the country’s efforts to reduce its reliance on imported fuel and bolster its domestic refining capacity.

The purchase involves a one-million-barrel cargo of Brazil’s Tupi crude, scheduled for delivery in the latter half of August.

This is the first time Nigeria will be importing Brazilian crude, underscoring the Dangote Refinery’s commitment to diversifying its crude oil sources and ensuring a steady supply for its operations.

The Dangote Refinery, Africa’s largest, has been instrumental in Nigeria’s strategy to address the long-standing issue of fuel import dependency.

Despite being the continent’s leading oil producer, Nigeria has historically relied heavily on foreign fuel imports due to insufficient domestic refining capabilities.

The operationalization of the Dangote Refinery is expected to change this dynamic, enhancing the nation’s energy security and potentially lowering fuel prices for consumers.

Aliko Dangote, the CEO of Dangote Refinery, said “Importing crude and refining it locally will significantly enhance Nigeria’s energy security. Our ability to source crude oil from various global suppliers, including Brazil, is crucial for the refinery’s success and the broader energy strategy of the country.”

The Brazilian crude, sold by Petrobras, is among the most cost-effective and suitable oil grades available on the global market, making it an ideal choice for the refinery.

This strategic import is part of Nigeria’s broader efforts to secure a stable supply of crude for its refineries, ensuring that the country’s energy infrastructure is resilient and capable of meeting its needs without over-relying on any single source.

In a related development, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently reached an agreement with oil producers to supply crude oil to domestic refineries at market prices. This resolution came after a protracted supply dispute, which had strained relations with international oil companies.

The agreement ensures that Nigeria’s refineries, including the Dangote Refinery, have access to the necessary crude supplies at competitive prices.

This move is expected to end the challenges faced by local refineries, which have struggled to secure crude supplies due to excessive premiums demanded by international oil companies or claims of unavailability of crude.

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NNPC’s Stake in Dangote Refinery Drops to 7.2% Due to Unpaid Balance

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Dangote Refinery

Aliko Dangote, the Chief Executive Officer of Dangote Refinery, announced that the Nigerian National Petroleum Corporation (NNPC) Limited’s stake in the refinery has dropped from the previously held 20% to a mere 7.2%.

This reduction is attributed to NNPC’s failure to pay the balance of their shareholding dues, which was expected last month in June.

Dangote disclosed this during a media parley held at the refinery on Sunday, shedding light on the current ownership structure and the financial commitments made by the national oil company.

“The agreement was actually for 20%, but NNPC did not pay the balance of the money up till last year. We then gave them another extension up to June 2024, and they decided to remain at the 7.2% stake for which they had already paid,” Dangote stated.

This revelation has come as a surprise to many Nigerians who had been under the impression that the NNPC maintained a 20% stake in the refinery.

The reduction in ownership highlights the financial challenges faced by the state-owned oil company.

In 2021, the Group Managing Director of NNPC, Mele Kyari, had championed the decision to acquire a stake in the Dangote Refinery, citing the profit potential and the strategic importance of having a say in the refinery’s operations.

The investment was seen as critical to ensuring energy security for Nigeria and supporting the country’s fiscal stability.

Earlier this year, NNPC’s audited financial statements indicated that the corporation had acquired a 20% stake in Dangote Refinery for $2.76 billion.

This included a $1.036 billion funding from Lekki Refinery Funding Limited, of which $1 billion was paid to Dangote Refinery and $36 million covered transaction costs.

During the media parley, Dangote addressed various issues, including the challenges of supplying crude to the refinery.

He confirmed that the refinery has been sourcing crude from the United States and Brazil, while also noting the government’s intervention to resolve the supply issues.

The Dangote Refinery, located in the Lekki Free Zone, Lagos, is a massive project with a capacity of 650,000 barrels per day (BPD). Once fully operational, it aims to become Africa’s largest oil refinery and the world’s largest single-train facility.

The refinery is expected to generate approximately 9,500 direct jobs and an additional 25,000 indirect jobs, significantly boosting the local economy.

In addition to refining, the facility includes a fertiliser plant that will use by-products from the refinery as raw materials, further enhancing its economic and environmental impact.

The refinery is projected to produce around 50 million litres of petrol and 15 million litres of diesel daily, along with significant quantities of jet fuel and other petroleum products.

The reduction of NNPC’s stake underscores the financial complexities surrounding large-scale investments in Nigeria’s oil and gas sector.

As the Dangote Refinery nears full operation, the focus will be on how effectively it can address the country’s energy needs and contribute to economic growth, despite the challenges faced by its stakeholders.

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