Valuing local resources to avoid global shocks, Abdul Samad
President of the Alhaji group of BUA Abdul Samad Rabiu urged Nigerian companies to increase the value addition of local products in order to avoid the recurring global shocks that often hit developing countries.
He said his group’s $400 million sugar refinery remains a pointer to the future of Africa’s agricultural sector.
It was even then that experts said his investment in agriculture generally confirms demands of the president of African Development Mr Akinwunmi Adesina, that agriculture will create Africa’s next billionaires.
They argued that Abdul Samad Rabiu’s investment in a vertically integrated sugar facility in Kwara State in Nigeria created opportunities for higher industrial growth and value addition given the multiplier effect of the project.
The $400 million project includes a 20,000 hectare sugar cane plantation, a sugar mill, a sugar refinery, an ethanol plant and a 35 MW bagasse-fueled power plant, a latest report on the account sugar cane residue should start working.
Although sugar may not attract the attention of other crops, even though it is frequently among the top five traded crops in the world by value. Africa has a few major producers – notably in southern Africa like Eswatini and Mozambique – but countries like Nigeria, Egypt and Algeria still import more than they consume. In Nigeria, imports account for 90% of consumption.
Harnessing Competitive Advantages: For Rabiu, sugar is one of the many fruits at hand when it comes to agricultural and labor opportunities under the country’s import substitution strategy. His group, one of Nigeria’s largest diversified conglomerates, is already the fourth largest listed company in Nigeria by market capitalization, operating in the food, cement, mining and infrastructure sectors, and now agricultural production and processing.
Rabiu made his fortune in cement and applies the same logic to agriculture by drawing on the country’s areas of competitive advantage to create jobs and wealth for the people.
For example, in the cement sector, the Group uses all local inputs, namely limestone and gypsum, all of which can be found in commercial quantities in Nigeria. He said this advantage has reduced production costs to make his brand of cement competitive enough against imports, both in Nigeria (which has become self-sufficient in cement) and neighboring countries. He said, however, that energy costs remained a concern. Localized production is key: Yet the math is simple in terms of agriculture, he says.