Abidjan, Ivory Coast
Food prices have been rising around the world, driven first by the Covid pandemic and poor harvests, and worsened by the conflict in Ukraine, which has affected exports of both wheat and fertiliser.
Even with a new deal that would allow grain to be exported from Ukrainian Black Sea ports, the impact of high prices could still be severe in Africa, which imports most of its food, and where the IMF predicts that inflation could reach 12.2% this year. .
Nigerian billionaire Abdul Samad Rabiu says it is time for African countries to work together to create a food value chain across the continent and produce more goods for domestic consumption.
Rabiu is the CEO of BUA Group, a food processing, infrastructure, manufacturing and mining conglomerate. His company has made investments across the continent to reduce its dependence on imports from Europe and Asia.
He spoke with CNN’s Eleni Giokos last month at the Africa CEO Forum in Abidjan, Ivory Coast.
High inflation, food insecurity, energy prices – what will you do to solve some of these problems?
Rabiu: Part of the problem is that we import 80% of what we consume. For example, Africa imported more than 55 million tons of wheat last year, and wheat is one of the commodities that has been hit hard by high prices. Since the Ukrainian-Russian (conflict) started, we have seen a situation where the price (of wheat) went from $250 to almost $600 a ton. And you know that Africa is very dependent on Russian and Ukrainian wheat.
So how is your contribution affected?
Rabiu: If you import and the price is double, what do you do? Prices need to be raised. And a lot of people can’t afford that. So we’re seeing a decline in production, processing and consumption, and that’s a big problem. That’s why I keep saying that we have to look inward, do everything we can to add value to what we have. We need to increase (our) production for the continent’s food security.
You’ve been in the pasta business, for example. Why haven’t you started already? Agriculture? I know wheat is hard to grow.
Rabiu: Wheat is difficult to grow, but we also like sugar and we are building the most advanced sugar plantation in Nigeria. It is a 20,000-hectare sugar plantation, four in one, fully integrated with sugar mill, sugar refinery, ethanol and power plant. We decided to do this because we realized that we were spending a lot of money importing raw sugar and this is something that could easily be planted and produced in Nigeria. Our inputs in terms of raw sugar will be drastically reduced.
The African Continental Free Trade Area was published (in 2021). Have you seen a real impact on your business?
Rabiu: The free trade zone is an amazing arrangement. We must all come together to enjoy the benefits. Of course, we also have challenges in terms of infrastructure, and for the deal to be successful, you need to fix your infrastructure space, especially in areas like ports.
Still finding this difficult?
Rabiu: Let me give you an example: it is more expensive to ship goods from Nigeria to, say, Lome (in Togo, West Africa) than from Nigeria to Brazil. And that’s because we have the ships without the ports. So these problems are there and we need to fix our infrastructure.