For all intent and purposes, it looked like the perfect scenario- a multi-billionaire native industrialist coming in to invest several millions of dollars in order to produce a commodity that the country was spending billions of Naira importing at a time when the forex crunch was at its hardest. This fairy tale stayed at just that- a fairy tale- for the state-of-the-art, billion-Naira Dangote tomato paste constructed in Kano Nigeria. For many, and probably most important for the Federal Government, that plant was supposed to save the country 400,000 tons of tomato paste imports annually and millions, if not billions of dollars. Unfortunately, the plant lies idle with several attempts to resuscitate it failing.

For Aliko Dangote, owner of the plant and Africa’s richest man, the greatest dent is probably to his ego as a businessman. For someone used to success, this blip could be irritating. In financial terms, though, the N4 billion or $12.74 million investment sitting idle is unlikely to cause any sleepless nights for a man whose cement business alone posted revenues worth N615 billion in 2016. And in any case, he has made arrangements to get his raw material himself, so the plant will work. It’s just a matter of when.

For the Muhammadu Buhari-led administration, this is another story entirely. One of the President’s mantras has been “We must produce what we eat.” Unfortunately, so far, his administration has failed at solving the problems that plague the agricultural sector. To make matters worse, this is coming at a time when oil prices have dipped significantly, effectively shrinking the government’s revenue as oil exports are responsible for over 70% over government revenue. As a result, the FG emphasized on diversifying the economy with agriculture voted as one of the most promising substitutes. So far, agriculture has not lived up to its billing.

This is not to say that the Buhari administration has not done anything in this regard. To encourage agriculture investments like the Dangote plant, the government has waived duties for greenhouse and processing equipment. Rice farmers, and very soon, tomato farmers benefit from subsidies from the FG. Despite these attempts, hardcore problems continue to hamper the rise of agriculture as a substitute for oil.

Take the tomato paste issue as an example. Nigeria produces a whopping 1.5 million tons of tomatoes annually. About half of what is produced, 750,000 tons of that is wasted each year. Given that Dangote’s plant can run a full capacity of 1,200 tons a day, the wasted tomatoes in Nigeria in one year can keep Dangote’s plant busy for 625 days or 21 months.

Yet, bad roads, erratic power supply and an obsession with producing oil are results of decades of endemic corruption where government has focused on what can bring in money for its members rather than infrastructural development. This has also affected agricultural practices. Low quality seed, scarce irrigation services, lack of storage facilities and the ever-greedy middle men are other problems that the FG need to tackle if agriculture is to take a central position in country’s economy.

If not, there is trouble on the horizon for the FG. There are not many other investors apart Aliko Dangote, if any at all, that can afford to keep workers on a N5 million per month wage bill for doing nothing while their investment remains idle. Already, another tomato factory in Lagos threw in the towel in November 2016, unable to import tomatoes due to a lack of hard currency as Nigeria struggles with recession. Investment, job creation, forex conservation and self-sufficiency will all continue to be dreams if investors continue haring stories like these. Oil will continue to reign supreme and diversification will go down as another fantasy of the Buhari administration.

READ MORE: https://nairametrics.com/why-dangotes-failed-paste-factory-should-give-buhari-more-headaches-than-dangote/

Dangote only thrives in monopolies where he controls production, distribution and exchange.

The tactics used in Cement and Sugar can't work in this instance. He tried it with Noodles and it backfired.

The raw materials are not in his hands, they're in the hands of the farmers and he's already failed.

Let him go and get the FG to give him exclusive rights over tomatoes na.

Watching closely...

B

I keep telling people Agriculture cannot do jack to resuscitate any economy rada.. Technological advancement is key
You spend a full year growing a big hectre of land, but on selling everything you cant even last for 2 months with the proceeds.

A company spends 1 yr manufacturing and selling phones, shoes, modern wears, cars, weapons, etc and smiles to the bank while paying salaries to employ others.

If we keep importing all the heavy duty vehicles we use in planting, and we hv no resources to fix them, we find out that the cost we expend on capital takes lots of yrs to cover.. But if we were to produve this heavy duty vehicles... Then the stres that the importation of same, puts on the naira will be reduced, and it will be far more affordable to farmers thereby y reducing their overhead cost and at the same time increasing their profits

ok

The pishure come be like say DANGOTE dey sell TOMATO with suit..

CUSTOMER:How u dey sell ur tomato?


DANGOTE: This one na fresh one o,take am 3 for 100naira


CUSTOMER: E cost o, e no gree 5 for 100naira?


DANGOTE: oya take am 5 for 100naira


CUSTOMER: 10 seeds nko for 100naira


DANGOTE

Hmmn.....y am I not surprised

C

whose cement business alone posted revenues worth N615 billion in 2016.

Leave me lemme die

if Dangote owns PASTE factiry, then who owns COPY factory??

Indirectly we depend on dango the for everything in this country

True

op why you put tomato for dangote front

Elslim:
if Dangote owns PASTE factiry, then who owns COPY factory??

Nigerians should pray that this country doesn't split up. Because if it does and Dangote faces only the North, the economy of the splinter nations may be in shambles.

We should be more enterprising and have industries that rival Dangote's in order to avoid over dependence on him.

Everything in Nigeria is not working as it suppose to be because of inadequate planning.

Elslim:
if Dangote owns PASTE factiry, then who owns COPY factory??

slay queens

If Dangote with the resources he has and the market Nigeria possess can still fail in a micro sector of Agriculture then why is it easy for the minister of Agriculture to always open his mouth and advise the youth to go back to farm without any augumenting policy to encourage the sustainability of the real system.

Go and tell him na

The problem is Nigerian's.
Is it Nigeria as an entity that grows tomatoes or individual Nigerians.

The only solution to our agricultural problem is guaranteed market. If you have 5 million tonnes of tomatoes, bring them to the government and we will buy at a price updated weekly. If you have 20 tonnes of cocoa, bring. If you have 500 broilers, bring. This will encourage people to farm and not be scared of what to do with their harvest. There was a time a lot of people went into fish farming but most lest because they end up begging market women to buy. If I know a processing plant where I can get a fair deal, I will farm and at the right time I will take my harvest there and collect my money. Even if the profit is small, I will manage it.

fratermathy:
Nigerians should pray that this country doesn't split up. Because if it does and Dangote faces only the North, the economy of the splinter nations may be in shambles.

We should be more enterprising and have industries that rival Dangote's in order to avoid over dependence on him.

You really think if not for monopoly only dangote has the guts to do this?

The solution to the problem is restructuring and resource control.
I've been hearing the need to diversify to agriculture since my secondary school days over 2 decades ago but it's just a lip service and mantra successive governments tout but no one really seems to do anything drastic about it.
maybe each state would encourage and ensure the success of such investments in their domain so as to get revenue from it.