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Adewole: Oil price, COVID-19 chasing Nigeria back to agric

By Gbenga Akinfenwa
05 April 2020   |   4:16 am
The current crash in the international price of crude oil is a mixed-bag in terms of its effects on Nigeria. While it has profound adverse effects on the country’s 2020 Budget and portends a great danger to the fragile economy


Recently, the price volatility of Crude Oil in the international market began a steep downward slide causing apprehensions on Nigeria’s fragile economy. In this interview, Taiwo Adewole, General Manager Okitipupa Oil Palm Company (OOPC) Plc, tells GBENGA AKINFENWA that development makes it imperative for the country to make agriculture the mainstay of her economy.

How do you perceive the crash in the price of Crude Oil on Nigeria’s economy?
The current crash in the international price of crude oil is a mixed-bag in terms of its effects on Nigeria. While it has profound adverse effects on the country’s 2020 Budget and portends a great danger to the fragile economy, it portends a blessing in disguise for the country.

This is so because within the economic misfortune lies a salient wake-up call on both the Federal Government and the citizens in general to return to agriculture and re-invent it as the mainstay of the country’s economic resources and a foreign exchange earner.

Now is the time also for all the 36 state governments, including the 774 local councils to begin to look inward for other rich and sustainable sources of income and put immediate end to this blind dependence on crude oil, a dependence that has made our government lazy, impoverished the citizen and set us against ourselves in the name militancy.

So there are lessons inherent in the slide in the price of crude oil, all of us, with the government taking the lead, must begin to appropriately draw from these lessons, return to agriculture and begin to have our fate in our hand, unlike what obtains today in the volatile international politics, which controls crude oil.

We may need to tell ourselves, especially those directing the affairs of this country, that the nation of Israel with less than eight million people, with no drop of oil, lives on agriculture, Norway, a country of less than four million people, lives on marine economy and Ghana, our neighbor, with less than 25 million people, even though it has oil; is not oil dependent. Why is our own different? Why are we the only oil producing nation that could not use oil to transform technologically as other producing nations?

Given that Nigeria is still exploring and discovering new sources of oil, do you think the fear of oil-dependent economy is not misplaced?
The danger of depending on oil is not about the continued availability or that the well will dry. Of course the well will dry one day no matter how long, but our potentials for agriculture and sea for aquaculture cannot dry. Apart from the fact that land has capacity for self-renewal, its fertility and yields could be boosted with fertilizer and improved seedlings.

Having said that, we must not forget that the world today is moving away from bio-fuel, for instance, in the developed countries that we sell our oil to, many of them have reached advanced stage to phase out cars that run on premium spirit. Electric-powered cars are taking over.

The narrative should not even be reduced to availability of the product, but about the fact that diversifying to agriculture, especially in the light of how the price has continued to tumble, has become totally imperative.

If you move round the country today you will still find infrastructure built by the then regional governments with money from agriculture. In fact most of what we can refer to as infrastructural legacies were put in place by our founding fathers with proceeds from agriculture.

I had said it a long time ago that the era of mono economy is gone and gone for good, agricultural and industrial revolution hold the key to our economic independence.

How can the government quicken the agricultural revolution?
As I said earlier, the surest and most effective way to respond to the challenges from the dying and undependable oil economy is by way of agricultural revolution. Our life as a nation depends on agric and without it we cannot survive.

To drive this revolution, the Federal Government should establish Strategic Intervention Funds for all the main sectors of agriculture to directly finance these sectors as we have in Tertiary Education Trust Fund (TETFUND) the Petroleum Trust Fund (PTF) and the Niger Delta Development Commission (NDDC).

In effect, I am calling for an Oil Palm Development and Strategic Intervention Fund, Cocoa Development and Strategic Intervention Fund, Groundnut Development and Strategic Intervention Fund etcetera. The constitution and operations of these Funds will totally be different from the operation of say Bank Of Industries, Bank Of Agriculture. They are to be funded and operated in manners similar to TETFUND, NDDC etcetera.

Are there lessons to draw from COVID-19 in the area of agriculture?
Well, the lesson deducible is the fact that living on natural food, especially fruits and vegetables is a factor for building high and strong immune system in human body. This has been seriously advocated and promoted by health practitioners handling fallouts from the pandemic.

Though this has not been scientifically proven, but the fact stares us in the face that one of the major probably reasons responsible for the low death rate from COVID-19 among the blacks in relation to the whites, is our diet culture, derived from practising agriculture.

If this is the case, which certainly it is; we must then be challenged to take agriculture and dietary culture that goes with it, seriously. Government too must make conscious efforts to promote it, especially in the execution of its national school feeding programme.

And from another perspective, if you look at the spread of the pandemic, you will notice that there is no nation of economic significance that is not affected. Every nation has risen to protect its citizens and economy. In other words, globalization is at a standstill or is on hold. Nations cannot depend on another struggling nation, hence we are compelled to look inwards more than before.

Even without boarder walls no one is attempting jumping into another infected nation.
So you have to look in the way of self-sufficiency. Major economies are struggling.

Your administration is two years old, what can you say of the nearly moribund OOPC?
It has been a very tough, but highly rewarding experience. The Board and management were at several times faced with the onerous task of taking very stern decisions in order to rescue the company from total collapse.

It was a choice of whether to take the risk and save the company or follow the path of the ugly past and allow the company to go under. Today, the result justifies the decision to go the way we have gone.
What drastic measures were put in place to stabilise or halt the collapse of the company?
We have overhauled the finances by conducting the audit of the financial statements of the company covering the last 12 years, which was never done before.

We have now instituted a cashless financial policy, which has ensured that all revenue of the company is banked 100 per cent from April 3, 2018 till date as against the practice in the past, where no revenue was banked despite the fact that the company had 23 bank accounts in about 15 banks.

OOPC is already in the process of holding its first Annual General Meeting since the past 11 years, the last one was held in 2008. This, hopefully will hold immediately after the country comes out of the shutdown due to this global Coronavirus pandemic.

The company is today positioned to return to profitability and is projected  to pay dividends to shareholders effective from its 2020 financial year end, having not paid any dividend since 1993. As a matter of fact, the figures are indicating that the company might pay an interim dividend after the half year result is published in July 2020, God keeping us all alive.

We have totally overhauled the skill sets in the company and recruited new staff with the capacity to deliver good returns coupled with adequate training programmes. They are earning salaries commensurate with what other large corporate entities offer anywhere in the world.

Since we came on board, the company has invested heavily in the maintenance of the plantations, including construction of road networks within the plantations to ensure easy evacuation of FEB for processing.

We have invested in slashing operations, which resulted in the clearing of significant part of the plantations that has been abandoned for 10 years.
The company has reactivated the broken down relationship with its host communities coupled with the payment of the due rent to land owning families, which was owed them in the last 30 years.

Fund leakages and loopholes for fraud have been responsible for the near-collapse of the firm, were you able locate and plug them? 
The first of our strategic reforms was our decision in December 2019 to license out the harvest of our fruits, while the licensees are expected to pay us upfront.

That has worked and has given the company the opportunity to generate significant revenue, while at the same time empowering our licensees who in turn gave job opportunities to several hundreds of youths in the area.

Do you have plans to rehabilitate the Mills said to be comatose?
We have received the technical audit of the 40 tonnes per hour Mill. What the report shows is very interesting. The report shows us first that to acquire a new mill of that capacity will cost the company nothing less than $12 million.

However, the good news is that the technical audit report reveals that the integrity of the major components of the mill has not been compromised and that we will require an investment of less than $500,000 to get the mill working to full capacity.

And what is the whole objective of all these measures and efforts, I can proudly tell the world that our target is to get the company ready for a return to the Stock Exchange. All necessary regulatory frameworks are being worked out to have that achieved before the end of the year.

Already, we are working with Greenwich Trust Limited to secure a core-investor to take up controlling interest in the company and that is expected to be consummated before the end of the year.