Richard Hargrave is the Managing Director, Dizengoff West Africa (Nigeria) Limited. He shares his views on trends in the Nigerian economy.
How long have you been in Nigeria?
I first came to Lagos in 1978; from 1978 to 1982 we were managing what was then known as JSK. I left in 1982 and came back in 1986 for Sniff Crime Picture Merger. I left and went to America and Japan before returning to Nigeria in 1997. Since then I have been in Nigeria. So, I have been in Nigeria for quite a while and I am enjoying Nigeria a lot.
As a player in Nigeria’s agricultural sector, how would you rate it?
It is an incredibly important sector, and Nigeria needs to be serious about it. The country is blessed in terms of land, climate, and many other things. Nigeria should be the leader in agriculture. I think government should not be in the business of agriculture. Instead, it should focus on the infrastructure essential for Nigeria to grow more of its own food, government needs to be focused on assisting in building infrastructure to help the private sector to build a successful agricultural sector.
One of the frustrations of government, which is a difficult challenge, is having its plans and initiatives for farmers abused by speculators and all kinds of dubious characters. For example, the non-agricultural sector can go on with 20 to 25 per cent interest rate, but it is impossible to achieve development in agriculture with such a rate. The government has to provide loans of low interest rates for farmers so that they can invest in land, crops and equipment.
The world is running out of arable land and water to make sufficient food, but what we have here is sufficient arable land, labour and water to make food. So, there is huge opportunity in Nigeria.
How best can the sector be improved?
It is not all about trade. We must keep enhancing the skills of our local people here and try to improve them. We are also looking at the value chain, from land preparation up to processing at every point we want to see value added in the production process. In this way it gives us an integrated approach in solving the agricultural problems and this is our trend.
Agricultural produce such as fruits and tomatoes often go to waste. How does this affect the economy?
I’m loyally becoming a major player in the agric sector in Nigeria. We are committed to building the world’s largest tomato manufacturer. Currently, we are probably the best tractor suppliers in the world. We are not into the business of selling low quality, insufficient tractors that can do the job. We need to buy the right tractors for the farmers. We are doing the right thing and the business is good.
Talking about how agriculture impacts the economy, I will give you the example of Kenya. Kenya has become the world’s third largest supplier of flowers in the whole world. We supplied to them 80 per cent of what we had. Twenty years ago this business did not exist in Kenya but they have become the third largest, now bigger than Holland which was the second largest supplier of flower.
That is what I want to do in Nigeria; I want Nigeria to become the largest supplier of tomatoes in the whole world. I don’t just want Nigeria to provide tomatoes for his own people; I want them to export tomatoes.
Has government policies had an impact in the sector?
Yes, of course, it affects every business; from business man to business man, industrialist to industrialist, government needs to do something about the cost of money in this country. You cannot build an economy in any private sector with 25 per cent interest rate. It is not possible. I understand the challenges of government and Central Bank. But the policy which is working in the country is creating unemployment. We have four million graduates a year who go into the market place but can’t find a job, that is 40 million graduates in 10 years. They need to find a way of putting employment in the hands of people.
Are you partnering government?
Yes, federal and state governments are our customers as well as the private sector. I think the view that government is not being positive in getting its hands out of the business of agriculture is definitely incorrect. For instance, look at the business of telecommunications, I came back to Nigeria in 1997 and there were about 50,000 Nitel lines, but today there are about 110 to 120 million lines accessible and all of them, which are all private communication companies, are working, why? Government is not involved. There is no business that government places its hand on that works; the same will happen in agriculture, the same will happen in power. The government knows this and they understand it. The change is difficult and it takes time because of different conflicting forces and priorities. The earlier wealth creation gets into the hands of people and leaves the hands of bureaucrats the better, it has happened time after time, in one country after another. This is what Nigeria is trying to do, one step forward and two steps backwards but it must surely happen.
What would you say is the impact of sub-standard tractors on mechanised farming in Nigeria?
If you import tractors that are not suitable for the land here, first the farmers will produce at a very high mechanisation cost. They are going to have breakdowns, buy spare parts and have downtime.
They will incur a lot of expenses beyond their budget, and therefore they will fail. Second, most of those tractors cannot really be used by farmers because the hiring agency that will give the tractor to the farmers might not have them because of breakdown and they will not be available for small and medium scale farmers. This in itself is pulling down agricultural mechanisation, which should actually be improving for us to have sufficient food production.
In Nigeria, you have a lot more rain and the soil is going to be heavier. You need a tractor that has the right tyres and the right gears if not the tractor will not work. Rather it will break down. If this happens there will be no technical tool available for the farmer. I can take you round this country and point out 2000 of these tractors imported into this country, one-week-old and never used. They come from China, India, Pakistan and they do not work. They are not made for the conditions here.