Dangote’s beautiful numbers

I’ve not been able to stop smiling since Bida local government chairman gave me the details of the meeting Dangote Group had this week with the deputy governor of Niger State and the Etsu Nupe in Bida.(I was at the palace on an unrelated mission; to inform the emir that renovation work would soon start at GGSS Bida.)
Dangote obviously wants 53,000 hectares of farmland. Out of which 16,000 hectares would be used for the planting of sugarcane and the rest for rice.
But that’s not why I’m smiling.
I’m happy on account of the volume of jobs to be generated (and the number of our youth to be engaged) through this business. Consider for example, the number of jobs needed for the planting and harvesting of sugarcane alone:It takes 25 men four hours to plant sugarcane for every hectare and 80 men same time to harvest – even in the presence of technology. Therefore, for planting alone, we need 1.6 million man hours and 400,000 men. Of course the labourers would work more than one hectare, but still a big number of people are needed.
And this is going to be an around the year program. With rice, three harvests are possible in a year. That’s not all. The Dangote delegation said they were going to invest 500 million dollars in Niger State. At the exchange rate, that is easily 140 billion naira.
But we’ve been here before.  We’ve heard all this before. Two years ago, on August 21, 2014, Daily Trust reported that Dangote Industries Limited (DIL) signed a memorandum of understanding (MoU) with the Federal Ministry of Agriculture to invest 165 billion naira across five states in Nigeria toward the establishment of integrated rice processing and production.
“Dangote has acquired farmland,” the report noted, “in Edo, Jigawa, Kebbi, Kwara, and Niger states, totaling 150,000 hectares for commercial production of paddy rice. Part of the agreement requires Dangote Group to establish two modern rice mills, each with a capacity to mill 120,000 metric tonnes of paddy rice, bringing the total capacity to 240,000 metric tonnes.”
Obviously that didn’t happen.  At least I know the land acquired from Niger State wasn’t put to use.
Instead of the local production, the major rice importers devised strategies to deceive the government on import payments.  The chief method they employedwas to simply exceed the concessionary quotas approved by the Federal Ministry of Agriculture.  In this regard Olam, Stallion, Bua, Millan, Ebony Agro, Atafi Rice and Arewa Rice Mill were complicit in the scam.  (I don’t know if Dangote counted among them, but recent Senate investigations mentioned the company.)
Together, they exceeded their import quotas by 652,944 metric tons; and according to the public notice published by the Nigeria Customs Service on April 14, 2015, they owed the federal government N21 billion in import duties.Here’s another way they operated:  if an importer had a rice mill and imported unprocessed rice to be processed at their factory in Nigeria, they paid lower duty.  Many claimed to be in this category, but imported processed rice, did none of the local production and enjoyed government incentives.
Stallion/Popular Foods was the biggest defaulter (owing 73% of the liability) by exceeding its quota by 475,017.33MT and owed N15.4 billion.  Arewa Rice Mill owed the smallest amount for exceeding its limits by only 20.4MT which brings its liability to less than a million naira, N664, 876.
The Customs Service gave them “up to Friday 17 April 2015 to pay up all outstanding liabilities due or face appropriate sanctions.”
At that time, some Nigerians believed that asking the importers to pay something they normally would have paid for their allocated quotas was not a punishment for an infraction.  If the Customs had continued with that method, the importers would have simply disregarded the limits and import whatever they wanted, rendering the quotas meaningless.
Therefore, the assertion of some Nigerians that the Customs Service (of that time) may be complicit in scamming the government, was not without merit.
So what has changed? If they didn’t do it before, why would they do it now?  Well, the body language of President Buhari’s administration may signal that the government is now serious about its policies and wouldn’t allow the importers to game the system as they used to.  Yet, these are some tricky businessmen.
I recall going to Swashi Dam with the governor of Niger State, Gov Sani Bello, to see a rice demonstration farm (of a company called Pearl, also one of the biggest importers of rice) owned by some Indians.  The journey was tasking, because the roads were bad.  The journey took us quite near the border between Niger State and Benin Republic, but the governor endured it to encourage rice business in his domain and to collect the benefits of the 4,000 jobs they promised.  However, while they said they were using 500 hectares to test which seeds would yield the biggest harvest, we sighted less than five hectares under cultivation.  While they promised a rice mill in Bida, up until last week when I was in Bida, I could only see two sign boards.
However, in the case of Dangote, it appears he’s serious this time.  I started believing him when he said he wanted to be the biggest rice producer in the world.  He’s already the richest black man. Now he’s found himself another challenge – and my state and other Nigerians are going to benefit in the process.


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