The Federal Government is expected to rake in about N6 billion from the concession of 20 silos in different parts of the country to private sector operators.
The Minister of Agriculture and Rural Development, Audu Ogbeh, disclosed this to State House correspondents in Abuja after Wednesday’s Federal Executive Council (FEC) meeting, saying that the decision was taken at the meeting.
Pointing out that the renewable concession of the 20 silos will be for 10 years, the minister explained that despite the concession, government remained the owner of the 20 silos.
He explained: “FEC approved the concession of 20 silos, most of them with a capacity of 100,000 tonnes each, after council members were convinced about the positive benefits accruable to the country from the concession.
“We informed them that the fact that we are conceding some of the silos does not mean we are reneging on our responsibility to guarantee food security. We are keeping six of the silos, which is according to international standard that we keep five per cent of all the grains we harvest every year; the rest will go to private sector groups.
“Those who bid and have shown capacity have been the ones allocated the silos; those who are unable to manage them will have the concession revoked. Government will earn N6bn in the 10-year period of the first instance.
“The Federal Government remains the owner of the silos and at the end of the 10 years, we can either renew, revoke or take over the silos and operate them ourselves.
“A total of 33 silos exist with a capacity of 1,360,000 metric tonnes of grains, and they are spread almost evenly through the geopolitical zones of the country”, the minister added.
Giving a background to the involvement of the OPS in the operations of the silos, Ogbeh explained that the process for the concession, which commenced in 2014, was delayed because the government wanted to ensure accountability.
Specifically, he pointed out that the process was carried out by the World Bank, the Concession Committee of the Government, NGOs, the private sector and the Ministry of Agriculture and Rural Development.
According to him, it has taken this long to arrive at this because the processes are very slow; we wanted absolute accountability.
On some of the benefits of the concession arrangement, the minister said that the private operators who won the silos would help to organise local groups to produce grains, to dry them properly, store and market them or even export.
He explained further: “We have requests for grains from different parts of the world — soya beans, sesame, sorghum and millet. We also have massive rice production going on and the likes of Dangote and Coscharis going into rice production now need these silos.
“So, concession of the silos to them means they will organise local groups to produce grains for them to dry properly and store and market when the need arises or even export. We have confidence that these private sector operators have the capacity to operate and maintain these silos successfully”, Ogbeh added.
