Nigeria looks to 'white gold' for economic recovery

02 August 2017 - 09:26 By AFP
Rising rice production is one of the few positives of Nigeria's recession, which is the west African country's worst in 25 years.
Rising rice production is one of the few positives of Nigeria's recession, which is the west African country's worst in 25 years.
Image: Gallo Images/iStock

Hamisu Haruna and his men are bent over, turning the earth under a relentless sun. The work is hard in this impoverished part of northern Nigeria but the harvest will be good.

"In the last two years my yield has jumped to 35 bags of rice against the 20 I was getting in previous years," Haruna, who is in his 40s with craggy features and a wooden hoe over his shoulder.

"Rice farming has greatly improved. I have had better yield and better price in the market," he told AFP at his farm at Dawakin Tofa, on the outskirts of Kano.

Rising rice production is one of the few positives of Nigeria's recession, which is the west African country's worst in 25 years.

Today about 5.7 million tonnes of rice being are produced every year -- three times as much as a decade ago.

"We are now living a white gold revolution," said Francis Nwilene, the Nigeria director of the AfricaRice research centre.

"People understand that oil is not something Nigeria can depend on anymore."

The potential is undeniable. But despite having vast tracts of fertile land, Nigeria -- the largest consumer of rice in Africa -- is also one of the world's biggest importers of the food staple.

In the Kano region, the GreenPro factory shifted from specialising in flour and poultry to white cereals four years ago.

"Rice processing is by far more profitable than flour and chicken feed," said production manager Salisu Saleh.

"Rice is a major food staple in our society which only few can live without."

In a sign of rice's paramount role in Nigerian society, a "Jollof price index" -- named after a popular savoury fried rice dish -- was launched by an advisory firm in June to measure food inflation.

 Uncompetitive

With domestic demand approaching 7.8 million tonnes per year, almost a quarter of Nigeria's rice comes from abroad, mainly India and Thailand.

Rice is shipped through the Lagos port or by road from neighbouring Benin, which shares nearly 800 kilometres (500 miles) of porous borders.

"Smuggling is a major issue which discourages local production," explained Nwilene.

The government has said it believes Nigeria can be self-sufficient in rice production within a couple of years and is trying to plug gaps from cheaper imports.

Small-scale farmers, who make up the majority of the rice producers, face numerous challenges, not least access to land.

Production facilities are also inefficient and costs high, while there are not enough ways for farmers to commercialise their products.

With fertilisers and machinery, Haruna estimates he could farm "four times the current field".

"I have a large farm but I can only cultivate a fraction because of my limited resources," he explained.

To boost local production, Abuja banned rice imports by land in 2015 and launched an ambitious aid programme overseen by the central bank targeting some 600,000 farmers.

In the arid north, new irrigation systems that allow farmers to harvest twice a year instead of just once during the rainy season have been introduced.

Dangote invests

Nigeria's economic crisis has provided a boost for rice.

As global oil prices hover around $50 a barrel, the country needs to reduce costly imports and boost exports to increase government revenue.

Faced with a severe shortage of foreign currency, Abuja has severely restricted access to dollars -- necessary to pay for imports -- and has repeatedly talked up the merits of local agriculture, which accounts for 24 per cent of GDP.

The rush for "white gold" is now attracting some of the country's biggest names in agribusiness.

Nigerian tycoon Aliko Dangote, who made his fortune in cement, announced at the start of this year that he wanted to invest several billion dollars in three northern states -- Jigawa, Zamfara, Sokoto -- to establish commercial rice farms and build a dozen processing factories.

Singaporean giant Olam, which already owns one of the country's largest rice farms in Nasawara state, is running at full capacity processing 105,000 tonnes of rice a year.

"Demand is high. Rice is a real business opportunity for Nigerians and will create thousands of jobs," said Ade Adefeko, Olam's vice-president of private sector and government relations.

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