Between Buhari and Nigeria’s local direct investors: The BUA example

It may not be found in the speeches, but there is something that makes President Muhammadu Buhari readily hop on the plane and sometimes helicopters to commission projects by Nigerian investors. And as the BUA Group sows continuously, including during the famine of hard economic times, it may have endeared itself to many Nigerians, including the president.

President Buhari flew to Sokoto to commission BUA Group’s new 3 million metric tonnes per annum cement (Line 4) factory. He later received the management of the group on a thank-you visit to him at the statehouse in Abuja. The Sokoto event was his second, having visited in 1985 as the then head of state to commission the 2nd line of the factory.

And last week, he was in the Ibeju-Lekki local government of Lagos state, way off the city centre, to commission the Dangote Refinery.
He attends these events personally to “promote enterprise and create employment,” as he says. But sources close to him speak of his great joy in seeing Nigerian investors rise to global heights and contribute significantly to the country’s socio-economic development.

One source said: “Mr President’s attendance goes beyond personal relationships,” referring to the BUA Group’s events. He recognizes that the chairman of the BUA Group is a huge ‘national resource’ if you permit me to use that term. He also believes that the massive investments of Nigerians in the economy are as important, if not more, as foreign direct investment.

“His ease of business initiative and the support the Central Bank of Nigeria gives Nigerian investors, which they readily acknowledge at the commissioning of completed project speak of his love.”

Investments could be foreign, significantly through foreign direct investment (FDI), but Nigeria has a good share of local direct investment.

Between FDI and LDI

Foreign direct investment, on which developing countries heavily depend, has many advantages, including:

• Stimulation of economic development and the avoidance of obstacles in international trade, since the presence of the investors in various countries, removes trade barriers such as tariffs.
• FDI creates new jobs and more opportunities as investors build new companies in foreign countries. This leads to an increase in income and more purchasing power for locals, leading to an overall boost in targeted economies.
• The development of human capital resources is a big advantage of FDI. The skills gained by the workforce through training increase the overall education and human capital within a country. Countries with FDI benefit by developing their human resources.
• Also, foreign direct investment allows for resource transfers and the exchange of knowledge, technologies, and skills.
• Foreign direct investment increases the target country’s income. With more jobs and higher wages, the national income rises typically and promotes economic growth.

However, the big LDIs provide many of these benefits, and most importantly the confidence their foreign counterparts need to come.
LDIs, as exemplified by the BUA Group, sow (invest) continuously in and out of season, including the famine of difficult economic times as was witnessed during the difficult economic season caused by the COVID-19 pandemic. Also, as is evident in the Nigerian stock market, where the big LDIs are major players, they are growth engines of capital markets.

Speaking at the inauguration of the Sokoto plant, President Buhari, who described it as the largest private-sector employer of labour in North-west Nigeria, pledged that his administration would continue to support serious investors to set up businesses that will take advantage of huge reserves of resources in different parts of the country.

“As you all know, one of the key economic pillars of our administration has been to create an enabling environment for businesses to thrive. This is necessary for job creation and indeed, for our economy and national security.”Confirming his love for LDIs, he said: “In the past few weeks, I visited Ogun and Kaduna states where I observed many private sector investments in action. And today, I am here in Sokoto to commission this multi-billion naira project”.

The president thanked the founder of BUA Cement, Abdul Samad Rabiu, and the entire team for the great work in supporting the government’s economic diversification and job creation agenda. He noted that the company, which has completed four new cement plants of similar capacity in the last five years in different parts of the country, is set to complete two more plants soon, had shown through these investments that they believe in Nigeria and its potential.

The history of Rabiu’s investments confirms the president’s observation. Since its birth as BUA International Limited in 1988 for the sole purpose of commodity trading, BUA, like the octopus, continues to spread its tentacles to key sectors of the economy, leaving indelible footprints.

Speaking at the Sokoto event, Rabiu commended the President for creating the enabling environment for businesses to thrive and acknowledged the support of the Central Bank of Nigeria (CBN) in setting up the gigantic project. He pledged that BUA would continue to invest more in the cement industry until Nigeria is self-sufficient and the commodity is made available, accessible, and affordable for all Nigerians.
He said, “In the past 6 years, we have completed 4 plants – two in Obu, Edo state, and two in Sokoto (of which this Sokoto line 4 is the fourth) with BUA’s total production capacity now standing at 11.5 million tonnes with the completion of this plant.

“Next year, we intend to complete the construction of two new plants of 3 million metric tonnes each for which construction is ongoing – one in Edo and the other, here in Sokoto.”

He added that he looked forward to President Buhari commissioning these plants next year, bringing total production capacity to 17.5million metric tonnes.

The industrial octopus

Set for continuous growth, the BUA Group recently listed a consolidated entity to be known as BUA Foods – a combination of its five food businesses comprising pasta, edible oil, sugar, rice and flour – on the Nigerian Exchange Limited in Lagos. According to Samad Rabiu the food business “is a huge business with a lot of impact, especially the plantation that we have in Kwara state because that is a 20,000-hectare project”.

The group expects to begin production of around 200,000 tons of white fortified premium quality sugar in the year ahead. BUA’s Lagos and Port Harcourt sugar refineries have a combined production capacity of over 1.5 million tons per annum. The Port-Harcourt plant is an export-based refinery with the West African region as its target market.

Rabiu told CNBC news that an expansion project in flour milling and pasta would be delivered in Port Harcourt by mid-2022. Currently, at 576,000 tons of flour milling and 250,000 tons of pasta, the Group’s combined capacity for both products is anticipated to increase to 1.4 million tons come next June.

The BUA Group, formed in 1988, is now one of Nigeria’s most important diversified groups, active in food (sugar and oil) and infrastructures (cement, ports, real estate).

Philanthropy

An essential feature of LDIs is their enormous appetite for philanthropy and spontaneous giving back to host communities and beyond.
Rabiu, described by one of his beneficiaries as a man with a large heart, is one of Nigeria’s notable givers. He provides direct succour to individuals and contributes to host communities’ socio-economic development.

Taking philanthropy higher and wider, in 2021 he launched the Abdul Samad Rabiu Africa Initiative “to unlock sustainable development opportunities in Africa, by Africans, for Africans that would cater for various interventions in education, health and social development.”

The initiative started with a $100 million annual funding for Africa’s social development and renewal – $50 million dedicated to Nigeria yearly, while $50 million goes to the rest of Africa.

Already, the ASR has made large donations to health and educational institutions across the country; and has gone as far as Ghana, where ASR awarded a $3 million education infrastructure support grant to the Ghanaian government through its Ministry of Education to eradicate ‘schools under trees’ whilst developing primary education infrastructure across the country.

Last year, President Macron hosted him in his office in the Élysée Presidential Palace to recognise his numerous contributions to humankind. They discussed strengthening economic and business ties between France and Nigeria to foster business growth between Africa and France. He looked forward to BUA Group being one of the African businesses leading that charge.

And Rabiu became the inaugural president of the French Nigeria Business Council, a private sector initiative to facilitate business cooperation between both countries, which was launched on the margins of the Choose France summit at Versailles. Other Nigerian members of the council are Gilbert Chagoury (Chagoury Group), Mike Adenuga (Globacom/Conoil), Aliko Dangote (Dangote Industries), Tony Elumelu (Heirs Holdings/UBA/TEF), and Herbert Wigwe (Access Bank). Also on the council are more than a dozen CEOS from some of the biggest French companies, including TotalEnergies, Axens, Danone, and Dassault.