We’re determined to change the economic landscape of Nigeria – Paul Andrew

 Olusegun Paul Andrew has for over two-decades been in the fore-front of supporting developmental initiatives and directing investments to Africa. As an Entrepreneur with a successful business and consulting practice, he has initiated, managed and directed world-class projects for key global institutions, governments and individuals in investment banking space in energy, finance, telecoms and now agriculture. As a seasoned wealth advisor, he runs a private office in Geneva and Amsterdam focusing on Africa’s huge and emerging opportunities.  Andrew is chairman of the Advisory Board of the African Wealth Report (AWR) and African Wealth Briefing. He is also chairman, Luxury World Africa Group- a wealth and luxury think-tank based in Geneva. In this interview with ZEBULON AGOMUO, Editor, he spoke about the 80 million dollar potato project in Kaduna and Plateau States which is aimed at generating employment to about 50,000 people, in the long run, and saving Nigeria about $200million FX through local potato production. He also addressed other issues relating to the economy. Excerpts:

I work for BlackPace in the Netherlands and Switzerland. BlackPace is an investment firm. What it has done is to partner with a local brand called Vicampro Group. Vicampro currently owns 7,500 hectares of land in Manchok, Southern Kaduna and Vom in Jos. Jos potato farm is 800 hectares fully and privately owned by Vicampro Group and they have planted 220 hectares potatoes and they are increasing that. In Manchok, 6,500 potato farm is being developed as well. We also have a processing plant to be set up in Manchok which is going to be on 5 hectares of land. The processing plant is industrial and is going to be the largest in sub-Saharan Africa with a capacity to produce close to 40 to 60,000 tons per annum of French fries and potato flakes. That will apparently handle local consumption in Nigeria and will export to neighbouring countries as well as other countries within the Sub-Saharan region. We have arranged the investment plan, and the total cost to put the facility in place is 35million Euros (about 45 million US dollars) which is already signed. The plant is being manufactured by Kiremko. It is one of the largest potato French fries, flakes plant manufacturing firms. So, what they do is that they manufacture the industrial plant and they also support the manufacturing chain by supplying all the technical bits you need in the process. So, we have reached an agreement with them to manufacture this plant. The plant is industrial in scale and total set up is 35million Euros by the time it will finish. Vicampro has already started planting the potatoes in readiness for when the plant is set up. It will take one and half years to build. The plant will do five thousand (5,000) kilogrammes of potatoes, French fries a day up to 40 to 60,000 tons per annum as a turnkey project which is what we are looking at; which is ultimate. But in the initial 1^st year, beginning from late 2017 to early 2018, we are looking to produce 15 to 20,000 (fifteen to twenty thousand) tons. Why, because you have to get the plant ready to operate to its optimal capacity to do 40-60,000 tons per annum. Currently, what is imported into Nigeria is between 40 and 60,000 tons. Because, actually what we eat here, about 90 to 99 percent of all the French fries are imported from South Africa, Belgium and the Netherlands as well. And I know it is like an annual importation of close to 250 to 300 million dollars which definitely we will save for the government and that also will increase the FX earnings. The revenue stream from what we do; I mean, we’ll earn FX to the tune or excess of 60-70 million dollars per annum, at least, in the first two, three years. And that will increase as we increase the capacity and that also will create additional jobs to 500 direct hands and 5,000 indirect jobs immediately within the next 18 months from now.  The potato value chain is actually what we are after and that is why we bought into the farm; 100 percent owned and (acquired). So, it is our own way of changing the economic landscape of Nigeria. Our strategy is to do it the professional way. We are looking to take Nigeria out of the mono-economy into a fully diversified economy. I am coming from an investment management background. Whilst making Nigeria a robust Agric economy, we are lending support to government’s economic blueprint for a sustainable and diversified economy. Vicampro Farm project will in the long run, inject about 50,000 jobs into the economy and also increase economic activities in the retail end of the economy.

Yes, we are doing potatoes and actually, our programme is to be the largest potato farm in Nigeria and in the Sub-Saharan Africa. I have earlier said that Nigeria currently does 830,000 (eight hundred and thirty thousand) tons as a whole. We are looking to do 400,000 tons in addition to what is being done. At least 400,000 tons would be on for the first three years. So, that’s why you see us acquire space and large land mass to be able to do that volume.

You use irrigation there?

Yes, we actually float one of the largest mobile irrigation system in Africa.

It appears you are taking agriculture very seriously, the way it used to be in the past. Why do you think it is the way to go at this moment?

Agriculture was a very serious venture in Nigeria before we discovered oil. The west was known for Cocoa; the North for groundnut; the East for palm oil. That was actually what Nigeria was surviving on until Shell discovered the black gold and we all abandoned agriculture. And unfortunately, we have not been fortunate with quality leadership- what I will call visionless leadership for the past 50 years; visionless leadership that never looked at other sectors. They killed the manufacturing sector; they killed the transportation system that could have supported agriculture, and other critical sectors that should be allowed to take root; and that is what brought corruption into the limelight, and people now started struggling for what they could get out of the pie. The centre became very powerful because they wanted more direct access to the oil.
The same corrupt nature that is systemic has passed from one government to the other, hindering the progress of the country. Right from independence in 1960 down to the present moment; we’ve been struggling to get it right. Leadership has remained an issue but that has to change. So our approach to the potato project is unique and strategic to the economy.But banks are hesitant when it comes to funding agricultural projects?

It is the same lack of vision; lack of purpose; it is still a systemic issue. Look at the economy, what have the banks done? They have relegated agriculture to the background. And borrowing at almost 25percent is an annihilation of the Agric revolution in Nigeria. CBN should look into this and lend at a pretty rate below 9percent they are lending to this sector at the moment. Following the meltdown of oil prices, several banks are now exposed to serious debts and have been burnt by the same oil that was their main focus back then. They’ve invested billions of dollars in a mono-economy without looking at other sectors that could drive growth and stability. This is absolute lack of foresight and strategy; they lack vision, and that is what we have seen. It is an adverse situation for the entire economy. I think we need to start looking at the economy differently. By the time you create this value in the economy, you’ll see the ripple effects.

Government has been mouthing agriculture, agriculture, agriculture. It appears things are not even done the right way to achieve the desired result. What do you think should be the proper approach to drive the policy?

There is no project that does not require foreign investment. What is required is to have the right people with the right mind to drive such policy. It also requires people to have investment appetite; people who understand what is needed to be done to make our economy robust; who can look at the economy and say, ‘this is the direction; this is how we are going to engage foreign investors.’ Things must be properly put in place to attract foreign investments. As I talk to you, no one is investing in this economy from abroad; FDI is being slowed because, the present government has not created the enabling environment to attract them. They have killed the investment spirit in Nigeria. They keep investors out because most foreign investors feel Nigeria is still a risk.
All that the current government is talking about is anti-corruption; so let the government finish with that. You want to clean up the society? Fine; you have our support; so that when I am dealing with a Nigerian, I know that I am dealing with a true Nigerian, but that is a 10-year vision plan. So, investors’ appetite is completely gone; I am into the potato farming project because I have seen what the local people are doing and I want to support their drive. I personally signed the MoU with other partners. I guaranteed the loan for the investment.How do you protect the farms from the herdsmen and their cattle?

Yes, people tell me, ah, it is very risky to invest in such massive farm in the North at the moment, the Fulani herdsmen and their cattle could invade the farms, and all that. But what we have done to secure the farm is simple and common sense. We dug about 5-6 feet trench round the farm. It is simple and common sense. Someone suggested we should use electric barbed wires to get the herdsmen pull back, but you know that by the time 10 or more of their cattle plunge and die in the trench, they will be forced to pull back. It is a common sense. We don’t need to preach a gospel to them to understand that. By the way, who would they see to fight; are they coming to fight that they own the land or what? That’s what we have done stretching up to almost 15 to 17 kilometres and it is cost-effective and also of huge benefit to us in the irrigation system.

We distributed 2000 seeds to farmers in Jos to encourage them to grow. We also buy back whatever they produce at the end of the day. We distributed the seeds to them so that it would not be a monopolistic thing. It is a strategy. On the day of distribution, the Plateau State governor was around and was shocked at what he saw.

How long does it take potato to mature?

Well, we harvest four times a year; that means every three months. Whatever is planted is harvested for instance, one is going to be harvested this August.

In Jos, currently we have done close to $20 million (twenty million dollars). Kaduna is going to do, with the processing plant and the farm, we are looking at additional $60 million (sixty million dollars) so, on the whole, we are looking at $80 million (eighty million dollars).

How do you protect your investment, especially when the processing plant is in place?

Yes, we’ve asked the government of Kaduna State to provide a kind of security. The state also will help in the area of power because we’ve got to tap into the grid. We are in touch with General Electric and they said they have a place in Kaduna, so they are advising on that, including the use of solar system. You know Southern Kaduna is a hot spot; so they’ve got to reassure us of adequate security and protection for our investment there, and the government has made a commitment in that regard.

Assuming you were President Buhari, what steps would you have taken to pull the country out of recession? 

Well, it is not the first time it is happening in Nigeria and also in Europe. I remember the collapse of the market in 2008; we were badly hit as well. We lost over $50 million dollars of our investment in Europe. When an economy is in recession, it is like you are in a coma. Coma is that you don’t know whether you’re going to die or recover. In that situation, every one prays for recovery. When the individual happens to die, hope of recovery is lost except you want to resurrect the person. If an economy is in recession, what you have to do which is what I have told the current governor of the Central Bank, he should learn from Bernanke (Ben Shalom Bernanke is an American economist at the Brookings Institution who served two terms as chairman of the Federal Reserve, the central bank of the United States, from 2006 to 2014). Now we are a liquid economy – not credit economy – so, that in itself is a strength. Secondly, yes I have heard so many people say if you put excess liquidity in the system you’ll create more problems. But I say No. what you should do is what we call quantitative easing which is what Bernanke did. He was the person that changed the economic landscape of the United States. I said to the CBN governor, go and learn from that theory. You know, no one has the monopoly of knowledge.
But what is happening now has collapsed the economy because market reacts to adverse or negative information. You have to be positive while you are still driving the anti-corruption initiative.
Instead of running a two-way approach of putting the economy back on track, government has been doing a mono-drive. It is focusing only on the anti-corruption approach which has completely killed the appetite of investors, because investors don’t like uncertainty. When the market is uncertain and the economy seems to be nose-diving, they‘ll wait for you to rebound; they can’t change your policy and they can’t change your economy too. The President appears to be having around him those who give him theory on how to go about the economy; it seems he does not have those who can give him the practical solution to resolving the economic challenges.
When you are in recession, what you do is to stimulate the economy; it is not about trying to feed school children, not trying to do social welfare, but encourage practical investment. Although the TSA policy is good, it killed the banks. What government needed to do was to monitor the banks on the usage of such funds; if that had been done, money would have still been in circulation. Again the banks are not creative what they do is just to receive deposits.