Admin l Saturday, November 14, 2020
Chairman, Board of Directors, Nigeria Flour Mills, Mr. John Coumantaros has outlined very practical and far reaching measures that could take Nigeria from its current economic malaise to her dreams of becoming one of the world’s advanced economies.
Mr. John Coumantaros proffered the solution as a keynote speaker at a webinar put together by the United States Soybean Export Council (USSEC), US Grain Council and World Initiative for Soy in Human Health (WISHH).
John Coumantaros who spoke extensively during the webinar said Flour Mills of Nigeria started 60 years, ago, when the population of Nigeria was barely 35 million and has recorded great success because it has been able to align with the economic goals of Nigeria and with a dint of perseverance.
According to him, the rapid movement from rural to urban areas and growth in population made up of mostly youths has created the need to create jobs to fund the growth and therefore great necessity for food security.
“There is a huge young population and with young people coming into the nation, they have to be fed, there have to be job for these people, so there is tremendous opportunity for people going forward”, he said.
Coronavirus Pandemic
On the Coronavirus Pandemic, the Chairman Board of Directors of Flour Mills said he is very proud of his company. “We are proud of our company, we managed to operate during the pandemic, we had about 4 or five sicknesses, but nothing fatal, so we are very fortunate, and I think Nigeria has done very well in the COVID crisis, it is to be mentioned that it has reached very low proportion but we are not out of it, but that has been a credit to the way Nigeria has handled the crisis with help from the US service. But collectively it has been very successful. But it has had a very big impact on the economy that cannot be under-estimated, or understated. It has impacted on the lives of people in a very traumatic way.
Post COVID Nigeria
As far as oil and gas is concerned, I don’t know how much, we can expect in the price of oil going forward but Nigeria has to rely on that axis as major source OF foreign income. But as the nation grows, foreign exchange earnings are not growing with oil and gas. It has to start coming from other areas and sectors, the economy has to develop and diversified, so the supply chain has started to be built more inwards, and you create a virtual circle of GDP growth, in other words, as agriculture links with industry, internally you are creating the raw materials that feed the factories that produced the products that are then bought by the farmers that have more income because they are growing crops so this linkage between agriculture and industry, that critical link between the two is critical for the future of Nigeria and that is where we are spending a lot of our time and that is where I think there is tremendous opportunities for American companies to invest in growth, right up and down in each value chain, the critical food value chain and other value chain because there is tremendous need, in education and medicine and infrastructure etc. There is need to build these value chains internally such that they are not relying on foreign exchange and they build themselves up and grow.
Protein consumption in Nigeria compared to others
Protein is a critical source for any nation to have, Nigeria lags behind Africa and the rest of the world in per capital protein consumption. Chicken, 1.9 kg per year vs Ghana, per capita, 7 kg per capital, South Africa 32, and 49 for US. In egg, we fared fairly better, 65 kg per capital, we outpaced Ghana 35, half for SA and US. Meat, 5.9kg per capital vs Ghana 9.3, South Africa 50, US 100 per capital. Fish, Nigeria 13.3, Ghana 2.6, but with fish we are doing a little better. So, these are all the sources of protein in the country and as the country grows is it not going to need more and more protein to feed and nourish its people?
The answer is yes and it is a critical must have. How does that happen? Today Nigeria produces about 700 000 tons of soybeans annually, 11 million tons of maize, 8 million tons of sorghum, 4 million tons of millet, and 3.7 million tons of cowpeas, and about 22/ 23 million tons of grains, and those numbers have to grow at least 5 percent a year to about 500,000 tons a year to keep pace with the population not to mention growth per capital consumption.
In 5 years that 22 has to become 40, so how does that happen and what happens if it does not happen? It is not really a possibility, it has to happen. So that action needed is increasing the yield, soybean, right now, we have 1 to 1.3 tons per hectares, which is very low yield, we should be able to get to 3/4 which is the minimum in South Africa, maize we have 2/3 tons per hectare a yield, which should be 6, 7, 8 and 9 not 2/3 tons so how do we create more yield for the farmers so that he can make money and produced abundantly and it becomes raw materials for the industries because with the Africa free trade agreement, Nigeria has to be competitive in sourcing raw materials in its price for gas, price of labour, in its infrastructure.
It needs all these things to be competitive in that environment, so getting the yield up from the farm and connecting those agricultural sectors with industrial sector will give not only a virtual GDP growth for the country and it is a necessary one because it will be enhancing food security, saving forex and setting the table for being competitive in African trade environment.
How do we achieve that?
Some people said we need seeds. Certainly we need seeds, we don’t need GMO seeds, but we can use the hybrid seed very well, but we need to build and grow our internal seed capacity, and second there are many simple agronomic practices in the application of fertilizers and spacing of crops and a variety of small measures if done correctly can enhance yield and can almost double yields with very little efforts with no magic seeds.
These are efforts we are doing with our partners, In Nigeria we are working with Vetiva in terms of seeds, and others in many other areas to see how we can develop yield, agronomic practices and improve aggregation. Four 4 years ago, govt privatized strategic grain reserves, these were silos that were built around the country to act as strategic grain reserves. For the most part they were never put into use, they laid idle, but now government has put these to private sectors, so they collect and aggregate grain during the harvest.
They have capacity to put feed mill there, they have capacity for distribution points for imports and fertilizers, so these can be very good commercial hubs in the hinterlands that can really help in general not only the farming but also the off-take of the produce to get to the market in a reliable and competitive way.
Need for Logistics
Also the rails, the roads and the rivers need to be better developed so that we can create a better internal logistics. I know the Chinese are working on the rails, My hope is that GE will come and do something in the rail system because we certainly need that much and I hope GE will come and do that, because we need that very much. I think this linkage between agriculture and industry is critical and it will be the real core foundation for growth because that is how countries developed, you create surplus agriculture values and you put that into manufacturing, you create surplus in manufacturing and you put that into technology and more innovative industries.
But you need to create surplus values in whatever you are doing; you cannot be subsistence and hope to develop. You need to create surplus values beyond subsistence, and this is how countries developed and that is how the Asian countries developed and that is how Nigeria will develop.
The role of technology
This takes me to another sector which is not my area of specialty, but obviously technology is vey key to the future of Nigeria. Nigeria has young population, fantastic entrepreneurial minds, very creative and industrious and there is tremendous need of how things can be done better through tech in Nigeria, there are a lot of foreign investors who want to invest in Niger but don’t know how and ways to connect them but I think technology is very key for the young growing population and Nigeria has to be at the forefront of the this 5th industrial revolution.
Core area of national planning
That is what I see, I see the link between agriculture and industry and I see technology as 2 core areas of national plan that need to be developed in full scope. And I think there is tremendous opportunity for investors to build along that route. Our experience, we began as I mentioned in 1960, we have grown with the country from 30 million people to 200 million people, we have grown along the way, instead of being a single farm, we are involved in 5 food value chains, grains, sweeteners, fats, proteins and starches, so you grow with the country, as you grow you have more needs, so it is very important for US companies to engage at the ground level with Nigerian companies to grow what is a tremendous demographic and tremendous opportunities at the same time.
The new mentality Nigeria needs/ factors for success
We are always aligning with what the nation needs, what are the needs and where it is headed. What are the resources at hand and how do you manage it. For example we know Nigeria’s population is growing, and it’s a tremendous market for everybody but if it does not have enough foreign exchange necessary then it is not going to be an import economy.
It needs to be developing not a petrol dollar mentality but mentality for creating a surplus value. So aligning yourself with the needs of the country and having the perseverance and determination to be there for a long time, do the right thing and over time it will come out in positive ways and have the fortitude to get through the difficult moment. We have been here for 60 years, so you need to be patients and do the right thing.
