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Oparaugo: We need to stop Africa from exporting raw materials, importing finished goods

By kingsley Jeremiah
22 July 2018   |   2:22 am
There is lack of infrastructure. If you have adequate infrastructure to support manufacturing, why would the grower of yam export yam tubers. Why should we export tomato and fruits and buy tomato puree and processed juice? Why should we export bitter kola and buy energy drink? The cost of production is so high in Africa...

Osita Oparaugo

Footprint to Africa Limited and Sinachi Farms Limited are Investment Bridge and food oriented companies promoting intra-African and foreign investments in Africa. Chairman of the Organisations, Osita Oparaugo, in this interview discussed need for Africa, especially Nigeria to move away from exporting raw materials to export of processed goods. KINGSLEY JEREMIAH reports.

Africa imports a lot of food despite available resources to feed itself. What are the challenges?
There is lack of infrastructure. If you have adequate infrastructure to support manufacturing, why would the grower of yam export yam tubers. Why should we export tomato and fruits and buy tomato puree and processed juice? Why should we export bitter kola and buy energy drink? The cost of production is so high in Africa, because there are no infrastructure — no roads, no railways, no electricity. These are the things that drive manufacturing. Hence, if those things are not here, Africa would definitely keep exporting raw materials and importing finished goods.

What are we losing out by exporting our raw materials instead of processing it in the country?
Africa will never develop if we continue to export raw materials out of this continent. Cote d’Ivoire, Nigeria, and Ghana, are the three highest producers of cocoa in the world. Cote d’Ivoire makes $1.6b every year exporting cocoa; the United States of America makes $20 to $30b a year from chocolate. Europe has the highest of the products.  They make nearly $50b every year with Germany, Belgium and Switzerland, with the chunk of about $15b each. Africa — Nigeria, Ghana and Cote d’Ivoire put together, makes less than $5b exporting cocoa. For us we want to process our plantain, we want to export plantain flour and not raw plantain. We want to export yam flour and not yam tubers. This is primarily why we set up this place.

The processing and packaging section of Bosch, based in South Africa have sent their Nigerian directors here twice and they have looked at the place. This facility will process one million bags of one kilogramme of plantain flour and 1.5 million bags of two kilogrammes yam flour every year for the first three years before we scale up production.

What is this project about and what is the driving force?
It is a plantain farm and then a plantain and yam plant, where plantain and yam will be processed into flour. It’s also going to serve as an agro-tourism centre. Within this farm, we have nearly a hundred and twenty economic trees from coconut to mango, oranges, tangerines, lemons and guava; among others.

The idea is to have people who come here as tourists. We want people to see the kind of crops that this land can grow and then of course, witness the processing of plantain into flour. People will get conscious in the next five to 10 years about what they eat, how it is processed; so we try to put all of that in one place.

What is the total investment in this project?
The total investment of this project is about $15.6m, and it is privately financed. We have sourced for funds. And of course, you know when you want to start a business you start with family and friends. We have sourced funding from family and friends, who are basically in the United States (US) and United Kingdom. We have put in over $6m into this project already.

People say why plantain? We have been on this land for over 10 years. We first leased it. When I looked at the area and saw how development is coming up; we looked at the crops that grow in Nigeria without being a problem to the environment and we thought of plantain because people plant plantain at their backyard.

How much do you think this project will save Nigeria in terms of food imports?
We have not looked at the statistics yet; some organs of Sinachi Farms are working on that. However, I can tell you that this project will support the Nigerian economy in so many ways. The competition alone that this project will bring in the Nigerian market will be amazing and we will like to see that happen; we will like to see more people who have access to plantain turn it into plantain flour and turn it into a tourism center, where people can come and see how this process takes place and also have access to some other economic trees to relax. We want to see that happen.

The plant would have the capacity of an annual turnover of about $15m. We do not really know how much it will save the country, but we do know that it will support the local economy a lot. At least, we are sure it will employ between 1,200 and 1,350 individuals with our outgrower program.When you look at the multiplier effect, maybe from there, we will begin to think of what it will save the country.

We are concentrating on doing what we want to do. We are concentrating on getting this place up and running by October 2019.We are trying to engage 20 farmers from eight states. We are looking at engaging outgrowers from FCT, Nassawara, Niger and Benue for yam, then Delta, Edo, Cross River and Akwa Ibom, for plantain to support what we have on ground.

We would have gone up to 80 per cent as we projected, but for the herdsmen. If you noticed, this farm is highly secured. It is quite difficult for you to own five hectares of farmland and wall it round including security wires. The amount of money that we have put in settling the indigenes was huge too. We have been on this land for over 10 years, we did not have any problem, but as soon as we tried to secure the place so that cattle will not come and eat up our crop, thereby endangering our workers who might want to protect the crops; came the indigenes who claimed that government did not settle them, that they were not compensated. We paid nearly N45m and we paid it in cash. Thanks to the Commander of the Special Protection Unit, who gave us men to be able to come here and settle the villagers. We compensated them before we were able to fence this place out. The money that went into compensation and fencing of this place took almost a N100 million of available funds that we had.

What further challenges do you envisage in this project and how do you think government can come in to assist?
The main challenge as at today, will be how to power this place. When I said before that it is a $15.6m investment, nearly $1.2 to $1.6m is going into generation of electricity.
We are discussing with an Indian company that is also based in Nigeria to bring one megawatt of solar plant here. Imagine if the electricity is stable; imagine if there is availability of power in this area; that is already $1.6m dollars that would have been saved. If the government would improve electricity generation, that will save us a lot.We have been able to source the first phase of funding from overseas and we hope that by the time we get to 70 per cent completion, that we will approach Nigerian government for support.