Why commercial agribusinesses resort to backward integration – Gov. Sule

Abdullahi Sule, Nasarawa State GovernorBusiness Day | 11 September 2024

Why commercial agribusinesses resort to backward integration – Gov. Sule

by Solomon Attah

Most commercial agribusiness investors in Nigeria are now resorting to backward integration, as a result of the challenges associated with foreign exchange.

This is just as the implementation of the Framework for Responsible Investment in Land-Intensive Agriculture (FRILIA), would not only attract large-scale private agricultural investments but will also ensure shared benefits for both investors and host communities.

Governor Abdullahi Sule, stated this on Monday, at the inauguration of Steering and Technical Committees for the Framework for Responsible Investment in Land-Intensive Agriculture (FRILIA), held at the Government House in Lafia.

The two committees are expected to ensure that large-scale agribusiness investments align with international best practices in land acquisition.

According to Governor Sule, most of these commercial agribusinesses are seeking to expand their local businesses thereby creating more demands for fertile land.

He emphasized that, with agriculture playing a pivotal role in the economic development of the state, full implementation of FRILIA would not only attract large-scale private agricultural investments but also ensure shared benefits for both investors and host communities.

He added that the FRILIA framework, as part of a World Bank economic transformation agenda programme, equally seeks to align his administration with the best practices and to ensure a healthy environmental and social practice.

“The FRILIA will increase Nasarawa State’s attractiveness for private investment and minimize potential conflicts between communities and investors, as well as the herder/farmer conflict in the state,” he said.

Governor Sule said, the steering committee will oversee the implementation of FRILIA and will be responsible for providing strategic direction, monitoring progress, and addressing challenges associated with the implementation.

“This is informing the reason why our administration continues to create an enabling environment for agribusiness to thrive. In line with this, we issued the Executive Order No. 3, 2023, that adopted the FRILIA.

“To further consolidate this effort and achieve the desired objectives, we are, therefore, today inaugurating the FRILIA steering and technical committees,” he added.

He explained that members of the committees were carefully selected from relevant business and agriculture-related MDAs to ensure that the state not only meet the SABER requirements but also ensure adequate stakeholders engagement in all business-related investments.

“Just yesterday, I received the new team that came to the Tunga Dangote project. They came to look for the opportunity to acquire more site. Because most of the commercial agribusiness investors have realized that with the foreign exchange challenges recently, they have realized it is difficult for them now not to go into backward integration.

“Most of those businesses, in sugar, flour, and the rest of that, from what I was told, declared loss for the first in many years in their 2023 results.  Therefore, they have now realized the importance of backward integration.

Just yesterday, I was unofficially informed that Dangote, instead of having just one facility in Tunga where they are going to have 18000 TCD to be crushed, they are now having two. One has 18000 and another has 9000 TCD up there somewhere around Azara, Akiri, or Wuse areas.

“This is all in line with the fact that we are providing the environment, our communities are willing to work together with the rest of the people. This committee will play a key role in the acquisition of additional land for them to have additional area they can have sufficient cane to crush,” he stated.

The Governor then assured of his administration’s willingness to support businesses in the agribusiness sector, especially since it provides much-needed food and wealth to the people.

He however disclosed that another 60, 000 tonnes per year rice mill will be established in the Akunza area, with the company already expressing interest in acquiring land for the cultivation of rice in Assakio in Lafia and  Doma local governments.

The Chairman of the Steering Committee and Deputy Governor of the State, Emmanuel Akabe, thanked his principal for finding them worthy of appointments into the committees.

Akabe noted that, for any nation to indeed fight poverty and hunger, attention must be given to agriculture, while pointing out that, Nasarawa State is endowed with arable land that can take any kind of crop.

“We know your drive. We know your principle. We know your sincerity. We know your zeal. We know your commitment. We are going to work assiduously to ensure that the objectives of FRILIA are achieved,” he stated.

Ibrahim Abdullahi, the Chairman of the Technical Committee and Managing Director/CEO of Nasarawa State Investment Development Agency (NASIDA), said the inauguration of the two committees is a critical step toward meeting our requirements for participation in SABER for 2024.

He recalled that, in 2023, Governor Sule issued Executive Order No 3, adopting the framework for FRILIA, a demonstration of the determination of this administration to ensure that large-scale agribusiness is in line with international good practices.

The FRILIA Steering Committee has Akabe as Chairman, Ibrahim Abdullahi as Secretary with Commissioners from Ministries of Lands and Urban Development, Finance, Budget and Planning, Environment and Mineral Resources, as well as the Attorney-General/Commissioner of Justice as members.

Others are Commissioners from the Ministries of Agriculture and Natural Resources, Local Government, Community Development and Chieftaincy Affairs, Women Affairs and Social Development, DG NAGIS, and MD NUDB also as members.

The steering committee is expected to promote transparency in land acquisition and resettlement for large-scale agribusiness investments, amongst several other functions. 

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