TGI’s rice mill at Argungu in Kebbi State in Northwestern Nigeria is operated by its Wacot Rice subsidiary and has an annual milling capacity of 120,000tn. The mill is being extended with a second production line, which will be commissioned in June and will double capacity, Gumel says.
Nigeria has raised local rice production to reduce reliance on imports to feed a growing population. The country now has between 70 and 80 rice mills compared with fewer than 10 in 2015, Gumel says. Demand for rice is “continuously growing” making the sector a “key area, which we should play in.” Farmers in Kebbi, who before 2015 were harvesting rice once a year, have increased that to three times annually supported by their offtake agreement, he says.
Increased domestic rice production, Gumel argues, has the potential to mitigate Nigeria’s food inflation, which jumped to an annual level of 24.45% in March. Food inflation, he argues, is largely driven by higher fuel costs in the wake of the Russia-Ukraine war. Producing more rice locally rather than importing it from southeast Asia can help slow inflation, he argues. More local chemical and fertiliser processing plants will also contribute by reducing the number of products that are denominated in dollars and so vulnerable to naira depreciation, he adds.
Most successful developing economies have been able to make significant parts of their supply chains domestic, Gumel says. He sees a shift back to farming as an occupation in Nigeria, supported by the higher yields which have been achieved through better fertiliser supply. Farming is achieving higher investment, and rice, wheat, millet, maize and sorghum are all seeing increased levels of production, he says.
In Kebbi, TGI plans to set up a “rice academy” for vocational training. Gumel aims to complete the construction of the academy by December and is in discussions with universities to design the curriculum. The aim is to launch the academy in February 2024. The constraints on Internet access and quality mean that, to start with, the academy will have to run on the basis of physical attendance, Gumel says.
The company is also considering projects in tomato and onion value chains in Nigeria, and may set up a cocoa-processing facility in Ghana. The country has shown that it is serious about backward integration in cocoa, Gumel says. The cocoa crop in Ghana has been unpredictable in recent years, and TGI wants to identify which aspects of this unpredictability are due to Covid-19 before a final decision is taken in 2024, he adds.
Lagos-based TGI has a diversified portfolio of investments in fast-moving consumer goods, food, agriculture, chemical and pharmaceuticals. Its operating countries include Benin, Ghana, the Côte d’Ivoire, South Africa, Morocco, the United Arab Emirates, India and China.
TGI is the parent company of TitanTrust Bank, which in 2022 purchased Union Bank, the second-oldest bank in Nigeria with 300 branches nationwide. Gumel says that he wants to “capture the unbanked” population of Nigeria and sees the agency banking model as the best current way forward. Branches are needed in key areas, while shopkeepers and agricultural dealers will extend the bank’s reach, Gumel says.
It takes time to convince people to enter a purely cashless environment
Nigeria’s technological constraints mean that, at least in rural areas, a fully digital banking experience is not yet feasible, Gumel says. With large parts of the population still struggling on 2G or 3G Internet, “you need the last-mile guy”.
There’s also a need for more financial education before some Nigerians will accept digital banking. “It takes time to convince people to enter a purely cashless environment,” Gumel says. “We cannot leapfrog reality.”
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