September 28, 2022
  • September 28, 2022
  • Home
  • Debt
  • Nigerian businessman aims for Brazilian-style agricultural revolution at home

Nigerian businessman aims for Brazilian-style agricultural revolution at home

By on March 23, 2021 0

During his farewell lunch with Brazilian agriculture tycoons in Brasilia in August, Christopher Okeke, Nigeria’s ambassador to the country and an agricultural businessman himself, raised a glass of cachaça to Brazilian farmers.

“Brazil was a net food importer as recently as the late 1960s and is now one of the largest agricultural exporters in the world. This should not go unnoticed in Nigeria, which has many of the conditions Brazil faced then,” he said, bidding farewell to the country that hosted him for two years.

Now back in Nigeria as one of its biggest agricultural investors, he tries to imitate the experience from Brazil cerrado savannah. Mr. Okeke owns Nigerian Starch Mills in Anambra State, the country’s first large-scale starch mill, and Quarra Rice in Kwara State, one of the country’s largest rice mills.

The traditional farming methods that dominated Brazil since the Portuguese conquest in the 1500s have been transformed in recent decades. For example, bring soybeans from Asia and genes crossed to adapt to the tropics have helped make the country one of the great breadbaskets of the world. Today the cerradoan area roughly the size of Sudan, provides around 60% of Brazil’s agricultural production of soybeans, corn and other crops.

“Brazil shares its flora with Nigeria and therefore many physical things that you see in Brazil are also possible or available here,” Okeke says. He notes that by the time Nigeria gained independence from the United Kingdom in 1960, the country was a leading exporter of groundnuts and palm oil – until the focus shifted to crude during an oil boom.

As an independent Nigeria began to earn money from oil exports, Mr. Okeke adds, “the ability to import wheat, rice and other foodstuffs created an environment where basic data on agricultural inputs and productivity have been obscured and received inadequate investment and attention”.

A renewed focus on agriculture as a centerpiece of President Muhammadu Buhari’s economic diversification drive has contributed to an increase in domestic food production. rice production for example, fell from 3.7 million metric tons in 2017 to 4 million metric tons in 2018. Yet, despite Nigeria being Africa’s largest rice producer and among the top 15 global producers, according to a 2019 report of the United States Department of Agriculture, production remains below domestic demand. According to a report published in March by the International Institute of Tropical Agriculture in Nigeria. Yet it uses only half of its 71 million hectares of agricultural land availableaccording to the Food and Agriculture Organization of the United Nations.

Drawing parallels with Brazil as “once a bankrupt nation that imported 70% of its food” but is now the “second or third largest food producer in the world”, Mr Okeke says Nigeria could very easily to be the fourth largest.

Based on the Brazilian experience, Mr. Okeke worked with agricultural experts and investors from Brazil to transform Nigeria’s swathe of vast Guinea savannah into a powerhouse of fertile farmland through the adaptation of seeds.

©Getty Images

“In the specific case of Nigeria, [it] is possible to repeat here what has already been done in Brazil in terms of progress towards the development of an organized and sustainable tropical agriculture,” says Alysson Paolinelli, a former Brazilian minister of agriculture who helped transform the cerrado into productive cropland. He advises Mr Okeke and says the West African country “has the necessary land area and conditions” – climate, soil, rainfall and topography – to boost food production.

One of the challenges is finding private finance for agricultural projects in Nigeria. “We couldn’t find a bank to get financing, that was a big hurdle,” says a Brazilian agricultural businessman looking to invest in Nigeria.

Funding for the industry relies heavily on government grants and low-cost loans, especially from the central bank, but that’s not unique, says Omoniyi Omojola, a Lagos-based investment banker who has been involved. in structuring and raising funds for several agricultural projects. “If you look at Brazil, the United States, Australia or other countries, sovereign subsidies and support are important.”

For him, there is “massive” potential for agricultural investment if a framework is put in place to attract local equity capital. “A simple win would be for the government to provide risk guarantees for investors’ equity, which would allow investors to seek additional private banks, pension funds or other leverage, and increase investor appetite” , he adds.

The biggest challenge may be demographics. Unlike Brazil today, the traditional, manual approach of smallholder farmers has kept yields below full capacity. Nigeria has somewhere between 15m and 30m smallholders producing about 95 percent of the country’s agricultural output. With the population of Nigeria – a country the size of Brazil’s agricultural state of Mato Grosso, which has just 3.5 million people – set to double to around 400 million by 2050, the land tenure will add pressures. “When Brazil went from being an importer to a producer, Brazil cerrado was uninhabited, there was no one there. Nigeria’s great challenge is not to export, but [to focus on] domestic market,” says Igor Corrêa Pinto, a Brazilian agricultural businessman with interests in Nigeria.

This point is clear to Mr. Okeke, who has traveled to Brazil to scour cassava and other crops since the 1990s. to ensure food security. We have a growing population, and long before exports are considered, feeding them in a stable and secure way must be a priority,” he says.