The #500m you’ll use to buy a duplex in Old Ikoyi or in Downtown Dubai will build you a 10 metric tonne per hour rice processing mill that can parboil,
That investment, you’ll return it in 24 months or less, depending on how much paddy you’ve access to.
But can you say the same of the cashflow the property will generate you less property taxes?
Before you accuse Kano businessmen of having state capture, please understand that Kano currently has the highest concentration of industry rice milling plants in Nigeria.
While Lagos people are drinking rosè and complaining about quota politics, there are businessmen (with little or no affiliation to Abuja) investing in the food supply chain, and minting big money.
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The people who criticize the President for doing backward integration for rice, make me laugh.
Companies importing old rice stock preserved with chemicals from India, Thailand, Indonesia and Malaysia are angry that their business stopped and they lost billions in the process
As compared to small holder farmers, suppliers of chemicals as herbicides and pesticides, blenders of fertilizers, the paddy stems, aggregators, obligors, loan issuing houses and everyone in the value chain that now have financial value from a $3bn per year industry.
It’s better you come out with your chest & say your importation & smuggling business stopped, rather than say the President is wasting his time doing backward integration for rice
The primary reason the prices are still high is becos the owners of milling plants are not getting
Governor and his kitchen cabinet will sit down and say how can we raise money to siphon; the bonds markets.
Commissioner of finance, accountant general and treasurer will put up a fancy document, send to DMO; dmo will approve, send to SEC; sec will approve,
Then come to Lagos,
Get a transaction sponsor, security underwriter, issuing houses.
The private sector doesn’t care as far as they can get the state to sign an irrevocable standing payment order to debit from source (state’s FAAC account should anything go wrong. State defaults, & ISPO kicks in.
The National Assembly has to come in (Senate and House Committees on Capital markets) to ensure that
1. Governors present fiscal strategy papers to DMO and SEC, and the bar for approval is steep 2. ISPO to FAAC is not the only guarantee the states give the private sector.
If Tolarams used to buy Yellow maize from it’s aggregator for #100k per metric tonne spending #5bn for instance in 2019, but now has to buy at #250k per metric tonne for instance, spending #12.5bn,
3 times to break even for it’s cornflakes business. Has it’s turnover for gross revenues gone up from higher prices on it’s goods, yes, but so has it’s operating expenses.
This is the foundation for the food inflation we see today, because while the secondary processors are able
to manufacture, they lack the inputs to do so from several reasons:
• Insecurity in the North
• Increase in prices of fertilizer, seeds, chemicals, lack of equipment to mechanize
This is why I said, everything you do is competing with food, becos while the income of Nigerians
For those of you who keep saying I’m writing on Twitter to position myself for a government appointment or possibly run for elections.
Let me state it one more time for those at the back:
I’m not interested in government; Appointments, running for office.
I actually believe that in a functional society, enterpreneurs are at the top of the pecking order. Which is the reason I’m working so hard to becoming a successful one.
And most of the things I write here are the things I’m learning along the way as I execute on my goals.
Not everyone believes that the Hallmark of a successful life is to get an appointment in Abuja or win an election.
In my books; it takes genius, passion & God’s grace to create a product that people use often, & succeed at that financially.
Let me explain what a tech company in Lagos did recently to their business model.
I mentioned Lagos because they have not expanded outside Lagos.
Their VC investors, friends of the founders and Customers who follow me will understand what I’m saying.
They provide food packs
and laundry service on a monthly subscription basis for the customers. When they first started, they realized that focusing on tertiary level of the value chain, and the tech interface that enables it, means they have tiny margins, lack control of supply chain, and are gifting
their profits to the third party vendors that provide these services especially for food for their customers.
So in 2020, the company bought a warehouse to turn into a factory for doing the procurement, and cooking of the food packs they deliver to their customers daily.
Jobs openings and labor turnover survey (JOLTS) of the bureau of labor statistics in the US says 4.5m people as at November 2021, had quit their jobs.
Amazon is offering new hires $180k sign on bonus. Netflix is offering $250k sign on bonus for new hires.
If you want to
understand the shortage of chips and other B2B additives and inputs for B2C companies, look no further than the disruption COVID caused, and the new one crypto currency is causing.
Other than the fact that G7 countries are amending labor visas to bring in new immigrants
(and Canada welcomed 406k immigrants in 2021)
OEMs are realizing that relying on third parties for the supply of key components (otherwise known as catalog manufacturing) or horizontal models, is no longer feasible.
This is the key reason used cars in the US have become so