Nigeria's rice cultivation project:  Fadama Nigeria's rice cultivation project: Fadama agronewsng

West African rice faces threat as UAE Group pushes Indian crop

By Business & Economy / Saturday, 02 December 2017 02:37

Phoenix Group, a United Arab Emirates-based food company which operates in the whole stretch of the rice value-chain, has announced plans to invest some $205m in the commodity, targeting Benin Republic, Cote d’Ivoire, Mozambique and India. On the face of it, the plan would bring cheers to these three African nations. 

 

However, on a closer look, it may not be so salutary. Details show that this move which will make Phoenix Group the biggest rice group in the world, is investing $50m in establishing a 250,000 tonnes rice mill in India, while deploy the remaining sum in the importation of the commodity into these African nations. So, these African nations are strictly going to be consumer markets, while production and processing (with associated job creation) takes place in Andhra Pradesh, India.  

 

Phoenix’s plans run counter to those of Nigeria and Cameroon, the power houses of West and Central Africa which might be the real targets of this commodity push. For instance, Benin is a major rice importing nation in Africa, but more than 90% of its imports are smuggled into Nigeria. Cameroon and Cote d’Ivoire, though some distance apart, have a healthy trade and are joined by a customs union of the Francophone nations. 

 

Commodities imported into one can easily end up in the other. Propelled by a policy thrust that had survived two changes of government, Nigeria has pursued a rice self-sufficiency drive for over 10 years and is at the cusp of meeting its objective. Information minister, Lai Muhammed said this November that the nation has a rice demand of 6.3m tonnes per annum, but the nation’s output is expected to hit seven million tonnes this year. Muhammed projects that Nigeria would start exporting excess rice output from 2018. A decade ago, Nigeria produced only about 2 million tonnes of rice and had to import some 3 million tonnes. But Muhammed announced that rice imports into Nigeria shrank from 644,131 tonnes in 2015 to about 21,000 tonnes in 2017. 

 

Cameroon is equally pursuing a rice self-sufficiency programme which has seen significant results. In 2008, the country produced only 15% of its consumption of this staple. Rice iport took a whopping CFA150billion, contributing to balance of payment issues for the country. The government then stepped up support for local rice production and some five years later, local rice had crossed 30% of consumption, amounting to some 135,000 tonnes out of a total consumption of some 650,000 tonnes. Rice imports into Benin and Cote d’Ivoire will exert pressure on local rice production in Nigeria and Cameroon. Phoenix Group, a US $2billion company, operates through whole spectrum of the rice value-chain, from production, procurement, processing, merchandising, right through to wholesale and retailing of the commodity. ’Happy Family’ rice is its flagship brand. The finance for this move was underwritten by a consortium of seven banks led by Standard Chartered Bank of Singapore. The issue was over-subscribed.

 

Author

Ojukwu-Enendu Okwudili

Ojukwu-Enendu Okwudili

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