Africa’s richest man, Aliko Dangote has revealed that he plans to invest $800 million in Dairy production in Nigeria. This is part of Dangote’s diversification plans into the Nigerian Agricultural sector.
Nigeria’s economy has suffered greatly from the fall in oil price. This affected the naira, which depreciated against the dollar to an all time low. It also resulted in stringent policies being put in place to save the economy from total collapse thereby leading to scarcity of foreign exchange. Following the economic woes as a result of depending on oil for about 75 percent of its revenue, the country decided to diversify its economic activities by looking into other sectors such as the Agricultural sector.
Nigeria has opened the doors of opportunities in the agricultural sector, which has attracted the interest of so many Nigerians, which includes the youths. Most youths have seen agriculture as a source of livelihood owing to the high rate of unemployment and under employment in the country. Prior to this economic downturn, which the country is gradually coming out from, Nigeria relied so much on importing foods there by making the local production to be less appealing.
Recently, Aliko Dangote has also joined the train of invests in the Nigerian Agricultural sector in order to help the government in its diversification plans that will bring the country out of recession. In May, the Dangote Group announced that it was investing about $1 billion in rice cultivation through its out-grower scheme. Dangote has an out-growers scheme where thousands of farmers are empowered with improved seeds and items needed to cultivate rice. A few days ago the company announced again that it was investing $3.8 billion Dollars into sugar and rice production. The conglomerate plans to increase its production of sugar to 1.5 million tonnes a year by 2020 from 100,000 tonnes that it currently produces. It also seeks to add one million tonnes of rice.
Apart from increasing the production of Sugar and rice, Dangote also plans to invest $800 million in Dairy production in Nigeria. The company plans to breed 50,000 cows to produce 500 million litres of milk a year by 2019.
This is a welcome development for Dangote and the Nigerian economy at large. According to research, Nigeria spends about $1.3 billion on the importation of dairy products and Dangote’s investment could help meet up with domestic consumption and if possible export some of its product. With a population of about 180 million people, the country is currently going through a shortage in local milk production, while importing more than 70 percent of its dairy products.
It is also worthy to note that the President of Nigeria, Muhammadu Buhari, has shown interest in the development of the Nigerian Dairy market. It would be recalled that the president in the company of a high-powered delegation from the Federal Ministry of Agriculture and Rural Development visited Denmark in May 2016 where he held talks with Arla Foods Denmark on the development of the dairy sector in Nigeria. Although the government identified that there is a long way to go before reaching self-sufficiency in Dairy production. During the visit, the government established that what is required, amongst other things, is a more formal ranching system to improve processes, yield and quality as well as to extract higher value.