Joe Attuenyi, the chairman of Ellah Lakes PLC, an accountant, oil and gas expert, and now an agriculture investor, speaks with Onyinye Nwachukwu and Ruth Tene Natsa on a number of issues, including the company’s foray into agriculture, the challenges facing Nigeria’s food security quest, and how public-private partnerships will help drive better outcomes for the country. Excerpts…
As an accountant and oil and gas expert, what lured you into the farming business?
I strongly believe that agriculture, done properly, can actually be as big a contributor to our Gross Domestic Product (GDP) as the oil sector. Post my foray into oil and gas, there was an opportunity to invest in an agric company, so I put some investments into this agric company, and here we are, Ellah Lakes PLC. It was a fish farming business owned by the Ellah’s family, which then “became moribund” and wasn’t trading anymore. It is actually older than the new set of investors; it’s been on the Nigerian stock exchange for quite a while. Many of us believed that the agri-sector provides an opportunity for both Nigeria and Nigerians to grow our economy in a different way from the oil sector, which to me is not sustainable over the long term. We saw that it was a good vehicle that we could actually take over. It’s already quoted on the stock exchange; we just needed to capitalise it. So that’s the new Ellah Lakes. It is not just a fish farming business now. It’s a diversified business in all of the agri-value chain. We are currently in Edo, Enugu, and Ondo, and these are where actual activities are happening. We are at different levels of starting operations in a few northern states because the land is there, there are lots of Small Holder Farmers (SHF), and we believe we already have a structure that can be easily replicated. We have invested in rice, cassava, piggery, and oil palms across the states we are invested in. We have significant hectares of palm produce, and that’s our goal—to replicate those in the new states we go to.
What opportunities do you see in the Agric sector and how is your company leveraging such?
Like I already said, and this is shared across the board and the management, and I emphasise that done properly, the agribusiness sector can be a huge provider of jobs, feed our people, and grow the economy, and we think we have created a vehicle that can do this. There are different strategies for achieving those goals. Look at Tyson Foods in the US and look at our land here in Nigeria; these are big, successful agribusinesses. You could actually just focus and be a big agricultural firm, or you could become a vehicle for small-scale farmers to empower them in the small places they are working to be more successful. And because you are their partner, collaborating with them, the more successful small-scale farmers you have, the more successful you become. For instance, in Enugu, Adani rice, we are partnering with the state government, and this is history. What we are bringing to the small-scale farmers in that environment are better seedlings and new techniques. The goal is being their partner to make them successful, because then, if they are successful, we are successful. In Edo State, we have a huge farmland, and one of the new initiatives we put out there is piggery, and we have a strategy that we are rolling out, hoping that in the next eight months, we will be the largest pig farm in Nigeria. These are the opportunities we see, and there are many. All over Nigeria, there are opportunities if you focus and know what you are doing.
As a key investor in agribusiness, what do you see as major challenges in the sector?
There are a lot of things you have got to navigate in Nigeria. We are trying to engage the Ministry of Agriculture and Food Security and its minister to share some of these challenges and ideas on how they can be addressed. Like I said, part of our strategy is not just to build big farms; there are so many small-scale farmers all over Nigeria that we can collaborate with, sharing new knowledge, seedlings, and better farming methods, that they are able to do far more, but all over, there is insecurity. When you are a small-scale person and maybe invest N10 million in some small farm, then security challenges drive you out of the farm or get the farm destroyed, it hits more. Then there are issues of organisation. Funding is also a challenge. It is difficult to bring dollars or find somebody who will put significant dollar investment into Nigeria today, and if they do, they’ll probably prefer to put it in oil and gas, so these are the challenges. Other things are policies that generally, you know. Tax incentives and all that.
The federal government talks a lot about incentives to farmers; would you agree that these actually get to the small-holder farmers?
It’s much easier for the government to deal with a big organisation because you can make a case and get some incentives. If you have 10,000 small-scale farmers in the state, the logistics, the organisation, and, sorry to say, the politics of distribution, skew performance. And it is part of the perspective we as a company are trying to take to the Ministry of Agriculture and Food Security that we have enough presence across the country and can help with the process. And I am sure there are other big agro-companies that can help with the process because just giving a small-scale farmer input doesn’t solve the problem. They need somebody to coach them. It is a practical business to practicalize and show them, follow up and show them the output, because once they see the output, they can repeat it on their own, but just giving them incentives and going away is not going to solve the problem.
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Are you going to play the role of extension workers?
We are going to use extension workers to help the small-scale farmers who we partner and collaborate with to create bigger value. This is because they are partners; the more value they create, the more value we have for ourselves. And we think we can make 10,000 smallholder farmers successful; we will be far more successful than if we put all that effort and investment just in our own farm.
What’s your primary business focus—export or local consumption?
Both, actually, we have the palm tree farms, for instance, which take longer to germinate; they are products you can export or sell locally. We also have a pig farm, like I said, that we hope to grow; there is a demand for it, so we do not need to export that.
Do you not think that major agricultural companies exporting their produce at a time when Nigeria is grappling with both scarcity and high cost of food commodities could be a disadvantage or disservice to the country?
It is a valid point, but the flip side of that shows that there is also a huge market in Nigeria for food stock, and this is essentially why we have a two-track strategy. You find that most subsistence farmers and small-scale farmers do not produce for export; they produce to sell within their local environment. And this is what we are sharing with the Federal Ministry of Agriculture—that we can partner with them in implementing this dual strategy. There’s nothing wrong with producing to export, because Nigeria needs the forex, but like you said, we still have to feed to survive. So if we collaborate with the small-scale farmers to increase output, they do not export. Most farmers would produce and sell in their local environment, and that would address your concern. Both can be done.
Ellah Lakes PLC concluded its special equity placement earlier in the year. Can you speak to why that was necessary, how have you fared, and how it will help the company’s business strategy?
We did our right thing, which was very successful. The company has been there, quoted on the exchange, moribund, and required some fresh capital. So, I would say the best strategy was to just take it over and recapitalise it. So, the first thing we did was that the current shareholders and the directors recapitalised the company, and that was very successful. Nearly every existing shareholder took off their rights, so we are far better capitalised today than we were before the start of the recapitalisation process. Financial strategy now is to make that capital work and deliver great value, so that if we then go to the market outside of existing shareholders, raising that public capital would not be that difficult.
What’s the plan on how to deploy the fresh capital?
Like I said, we are building out the piggery. The strategy is to make us, hopefully, the largest pig farm in Nigeria in 18 months. It is going to take a lot of capital to do that. We are expanding the rice production facilities, which takes capital. We are collaborating with small-scale farmers to be a facilitator of growth, or a mentor for them, through training and improved seedlings; all that takes capital, which leads us back to the Federal Ministry of Agriculture. We are reaching out to them to say this ought to be a public-private collaboration. There is a limit of risk that private investors can take, but if there is government support and collaboration, it will ease some of those things, and that’s essentially what we are using the new capital for.
Do you think that the government is ready for the kind of public-private sector collaboration you are pushing for the agricultural sector?
They have the plans and know the goals that need to be achieved; they are patriots. The thing is, implementation can sometimes be a challenge. It could be challenging, security, or even politics, and that is where we come in. We are not politicians; we are just agricultural investors. And I think when you take the good plans that the government has and take an efficient operator and match the two, it will make for better delivery of these good goals. Because if you go talk to the Federal Minister of Agriculture, you will see the initiatives they have; they are sound initiatives. But like I said, an efficient operator needs to be merged with sound policy operators to ensure that the goals are delivered.
Are we expecting Ellah Lakes to key into some of these government initiatives to boost food security as announced by President Tinubu recently?
Yes, we are. It is an ongoing and continuing conversation. And like you know, the Ministry is a functional government institution with all its bureaucracy. There are different stakeholders within the system that you need to convince, and they in turn convince the minister.
Recently, we have seen the price of garri, which is one of Nigeria’s cheapest staples, skyrocket. How do you access that segment, and do you see things turn around?
We are very optimistic. Is there hope? Yes, absolutely. There are policies and initiatives coming out of the government. My personal opinion, and I think the company shares that, is that those policies and initiatives need to be coupled with efficiency from the private sector—in a private-public sector arrangement—to turn those hopes into reality. So, yes, there’s hope. What is happening in cassava or garri is not different from the challenges the rest of the economy faces. There is insecurity, crops are being damaged, farmers are operating with old-style farming techniques and seedlings that my grandpa used, etcetera. So there is a need for organisation, retraining of the farmers, new seedlings, new methods of farming, and generally teaching them new ways of doing things.
Who is to be blamed for some of these challenges or failures if the government has efficient policies and initiatives in place?
I don’t like using the word blame because, on the policy side, it’s only the government that can generate policies. And like I said, the policies and the initiatives are there. I think it is part of our job to also engage with the policymakers and say, historically, Nigeria has done it this way for maybe 30, 40 years. It has delivered X. But we think we can do three times X or X plus Y if we partner with you to bring organisation, efficiency, and education to the farmers. Now, that process, because it’s not what has been done in the past, takes some time, especially in a bureaucracy. People say bureaucracy is slow. I say yes, it is slow, but there is an advantage to it. That the process of convincing helps to remove rubbish when it is done properly. So, for me, as a private sector person, I will, even though the process is slow, but the truth is, when done properly, that “slow process” helps to remove rubbish and helps to confirm that there is credibility behind it. I don’t play blame games; I just think there is opportunity to do better in Nigeria.
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Are organisations like the All-Farmers Association (AFAN) helping to promote some of the issues you have raised?
I think the conversations are going on; everybody has the same goal. But like I said, it’s a process that takes time. You might not be making a lot of noise in the media, but remember, for most skilled farmers, this is their livelihood. They do not have side hustles; the guy doesn’t want a small food harvest; he would like to sell 10,000 tonnes of beans rather than 1,000. So those conversations are going on, and sometimes some conversations are better without much noise. You might not hear, but it’s the result that is important, and we think they’re heading in the right direction.
There are ongoing conversations around improved seeds, hybrid seeds, and GMOs, among others. What’s your take on the GMO debate?
I don’t think there is a prevalence of GMOs in Nigeria to start with; what we have are improved seeds. IITA does a lot of scientific work in that area. They have hybrid seeds that grow and harvest faster. I do not think we have the GMO problem in Nigeria as we speak. Having said that, I will share with you my personal opinion; it is not the company’s opinion. If you look at Maslow’s HIERARCHY OF NEED, at the very bottom are the basics, foods, and my answer to people who talk about GMOs—even though we do not have GMOs—look, faced with the level of hunger that is in Nigeria today and the choice of eating GMOs, what will they choose? In the UK, for instance, if you get into any of the grocery stores, products are labelled organic, non-organic, and not particularly stated GMOs, of course.
The anti-GMO campaigners are worried about the absence of labelling; Nigerian stores do not label, and usually the products have very tiny print that may not even be visible to some people. And there have been allegations of illnesses attributed to GMOs; could you speak more to that?
I am not a scientist, and I won’t speak to the alleged sickness that comes with GMOs. As an agricultural company, I cannot afford to get into that controversy, especially as it is not a real-life issue. But as an individual, what I will say is that it is when you have eaten the cheap food and you are full and have a bigger disposable income that you can begin to think of moving to healthier options, but the hungry man is going to first eat, and as his life gets better, he can now begin to argue organics and inorganics. Which ties back to the smallholder farmers (SHF), who if we can empower them to produce the food our people eat, the less the need to have this conversation about GMOs. This is because the SHF can be empowered with improved, hybrid seedlings without necessarily going down that road.
Over 2 decades of the Maputo declaration, Nigeria is yet to allocate even 3% of annual budgetary allocation to the agriculture sector. Does this show enough government commitment to food security?
In a funny way, I will be a defender of the government and the ministry of agriculture in answering this question. If you look at every sector of the economy and every social service, there is a declaration somewhere demanding x percent of the budget, whether health or education; there is even a Beijing declaration for women. If you add up those percentages, then to worsen the matter, we have a budget/cash challenge, so maybe it is my accounting background. So I am not going to sit in front of the minister and ask why the sector does not have 10 % because I understand the issue he is facing. I am going to work within the envelope of what is possible for him; I do not need to add to his problems. I want our company to be one of the solution providers.
Seeing that funding is a major challenge, what alternatives are there, especially for the smallholder farmers?
It is the collaboration I talked about because the ministry of agriculture is not going to get 10 percent of the budget. It therefore means that we need to be creative, and that is the value proposition we are sharing with the minister. The creativity is a combination of private and government capital like Ellah Lakes and the Ministry’s budget, and the more success we can show, the more private capital will come because there is a limit to how far the government funds can come. But we need them for policies and security, but we can combine their capital and ours to do more. Economies are developed by private capital; the problem is that the public capital needs to create the enabling environment to give the guy in New York the confidence to come in. Agric is big business; it is not charity, so part of our job is to work with the ministry to see how those challenges are reduced, if not eliminated, and also to see how we can cooperate with them with our knowledge, expertise, organisation, and capital, with their policy knowledge, their budget, and how these two can work together to make agriculture something that graduates will want to invest in. We can create a viable sector, but it takes private and public collaboration, including funding.
Do you think the federal government policy on massive importation of some food items is a threat to local farmers?
I do not think so; it is not a permanent thing. The way I understand it, it is a temporary solution to an immediate challenge. I don’t see that policy as a threat because it is not permanent; it is a short-term solution to a short-term problem. Our goals for Nigerians are long-term.
Considering the declining age of farmers, is it a concern that Nigerian youths are hesitant to embrace agribusiness, and what’s the way out?
I love Nigerian youths a lot because they have a sense of entrepreneurship; even my foreign friends and partners say so when they come here. They see that zeal; if you show success in an area, the Nigerian youth will come. Right now, all they are seeing are the challenges and difficulties. Just take any other sector that the Nigerian youths have taken over, whether it is music or tech, because they can see success. You find lots of young Nigerian youths working for foreign tech companies even within the challenges of the Internet and power, so I do not have any fears for the youth in my view. If we show them there is success in farming, they will automatically take it up, that is what I think.
