Being the interview conducted by Arise Television on its program, Arise Xchange conducted by its Anchor Boason Omofaye, featuring Olam Agri’s Ade Adefeko.
Ade Adefeko is presently a Vice President, Corporate and Government Relations at Olam Agri, unarguably Nigeria’s largest Agri Business and Food Company as well as Africa’s biggest Rice Farmer and Miller.
The Interview:
Arise Xchange: Nigeria is said to be short of the massive investments that are required to catalyze the country’s Agriculture industry from its traditional system to a global power house. Today Nigeria’s agriculture remains largely subsistent, dominated by traditional small holder farmers and a few deep pocket names such as Olam International and other big name consumer giants.
Ade Adefeko is Vice President Corporate and Government Relations at Olam Agri. He is also Botswana’s first Honorary Consul to Nigeria. He is also part of the Nigerian Chamber of Commerce Industry Mines and Agriculture, NACCIMA Family.
Banters.
Arise Xchange: Give me what new thinking and approach to Agriculture investing we need to adopt very quickly in Nigeria?
Ade Adefeko: Interesting question Boason. The last time I was here in January, we were looking into the new year. I agree with you, I saw what you showed from the onset and it’s interesting to know that we are facing a serious crisis. The crisis we are facing is not a food security crisis. We are facing what is called a food supply chain crisis. It’s a supply chain crisis to a large extent occasioned by the Ukraine War.
If we are not very careful, we might have a problem with Taiwan, China and America. So we are talking about global conflicts affecting agriculture. Food security is very important. Interventions coming from the likes of AfDB in terms of funding, to catalyze agriculture, you know when we talk about agriculture, we talk about agribusiness.
Before now, people mis-conceptualize and mistake faming for agriculture. Farming is subsistence, agriculture is business. Of course you know Olam Agri, it’s one of the largest in Nigeria and indeed globally. There are no new investments coming in parse because of what you call 1., Fiscal and Monitory policy misalignment, monitory policy misalignment because of exchange rate issues. For example, Nigeria consume between 4 million and 5 million tons of wheat, guess how much we produce, Fifty Thousand tons (50, 000 tons). Government was considering banning wheat which is the major ingredient for producing bread, pasta and the likes.
Arise Xchange: What about Cassava?
Ade Adefeko: We can do cassava. But we are talking about Pallia Change. Pallia change is a bedrock thing, you cannot legislate it, you can initiate, nurture and incentivize. To a large extent, we are doing very well in area of Corn or Maize but we are talking about wheat. Wheat comes from Ukraine, Canada, Russia and America. The largest producer of wheat on the continent of Africa is probably South Africa and coming a distant second is Ethiopia. There are ways we are trying to do it and it is not Geometry but Arithmetic, 1,2,3 instead of 3,4,6.
Arise Xchange: What about the Fiscal side?
Ade Adefeko: For me, I think there needs to be a conversation between the Governor of the Central Bank and the Minister of Finance. Minister of Finance; Fiscal, Central Bank Governor; Monetary, Alignment not misalignment. The Minister of Agriculture should not be a casual bystander but it looks like he is at this point in time. I am speaking from a NACCIMA vantage position. I am the Chairman of the NACCIMA Export Group. When we’re talking about exports, how much of it are we doing? Not much. There is no quantum leap. We have a long way to go. Are we doing well? Yes, can we do better? Of course we can!
Arise Xchange: I wonder where countries such as Singapore are getting Billions of Dollars to invest in Agri Business?
Ade Adefeko: Singapore, you have to understand is a City State. It has a Sovereign Wealth Fund to the tune of Three Hundred Billion US Dollars ($300, 000, 000, 000). That is a lot for a City State or for a country under 3 million people.
Arise Xchange: That’s roughly 70/80 percent of our GDP?
Ade Adefeko: Thank you very much, pretty much the case. I know that with you in Border Trust, every other thing is Data. For us, you know Olam is partly owned by Temasek Holdings, which is the Sovereign Fund of Singapore and for them they invest in beautiful brides, of which Olam is one. We have common companies. Standard Chartered and Olam are members of the Temasek family. There is a lot they are doing but for them it has been consistency over the years.
They have become what you call Capital for Capital. Capital flow goes where it is accommodated, where the ground is soft. Capital is mobile. For us right now there are too many contending issues. We have power problems, we are going through political transition, I won’t call it political instability, first quarter next year is elections, everybody is adopting what the late Nigerian Minister of Justice called, a “Sidon look” approach. Everybody is watching, waiting in the wings. I saw that you were speaking earlier to oil prices, by Winter Oil prices are going to run up between $150 and $200 and gas is going to go double digit, there is a lot happening.
And you look at the European countries, like France ( energy) and the gas pipeline from Morocco.
Arise Xchange: Can we get foriegn investment into Agriculture massively , the way Olam gets it?
Ade Adefeko: You see, you can only get foriegn investment into Agriculture when investments come in, let me give you a quick example, the Airlines, for those who are traveling by air, this is traveling season, 450million dollars is trap in the country .
Arise Xchange: But Agricultural investment in dollars will have to be patient money, it is not money you pull out the next day?
Ade Adefeko: I aggree with you, especially with Capital, it could be between 3 to 10 years , but that is not coming because there are no incentives, the landscape is very very unattractive now.
Arise News: Do you think the new Administration next year should focus on that, and how quickly should they hit the ground running in terms of Agriculture investment in changing the whole strategy?
Ade Adefeko: You know i always tell you that I am not a politician, but talking about the Obedients , the Articulated
and the Emilokans, those who are in Nigeria will understand what I am speaking to, that is any of the three candidates, but there are more. We have to set the Agenda.
The Agenda is “what is competitive and what is our comparative advantage, what do we have comparative advantage on? Rice, Soya, Cassava and the likes, that you need to harness, functional silos? no, strategic grains reserve? no, if we did , we wouldn’t have been where we are.
My company was able to initiate a deal with India, to supply wheat to Nigeria through Olam, and right now, through the intervention of the ministry of trade and investment in Nigeria, Olam is helping to bring wheat to Nigeria from india, Technically speaking, it’s come at a subsidized rate, I am sure you are aware that bread prices have gone through the roof and if you look at the crisis in north Africa, what occassioned it, is the price of bread.
Arise Exchange: You were part of Nigeria/ Botswana trade mission recently, because you also have that country that is rich in manufacturing and Agriculture, what are the learning curves for us from Botswana?
Ade Adefeko: What is important to note is that , Botswana is a small country, doing big things, 2.3 million people, 3.3 million Heads of cattle, they have more heads of cattle than Human beings, but I joked, that if Botswana wants to export all the beef they had to Nigeria, by the time all our Hotels and hospitality industry takes it, they will have no beef to eat.
So, what did I suggest, bring in experts to Nigeria, let’s have artificial simulation, let’s have blended animal husbandry and that is the way to go.
Don’t forget that in Botswana , they are the largest producers of Diamonds, but of course you know, Diamonds are not forever.
Botswana is a country that has the second largest pension funds after South Africa, for a country that is 2.3 million people, they need to open more, they have something called, “A reset Agenda” the way they were doing things, they were a bit closed, but right now, they are being encouraged to be more open, on the corruption index, they are almost zero, on perceptions index , they have probably the third most powerful passport , Ease of doing business, is very easy.
