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Forex Threatens 40,000 Jobs as Food Prices Soar

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Forex Nigeria

The difficulties in getting foreign exchange and the steep fall in the value of the naira are seriously affecting the manufacturing sector, with prices of locally made and imported food items heading northward, IFE ADEDAPO writes

The scarcity of foreign currencies in the country, especially the dollar, which has made it difficult for manufacturers of essential food items to import raw materials into the country, is threatening about 40,000 jobs.

Investigations by our correspondent showed that the high cost of importation due to unprecedented fall in the value of the naira has made importation difficult and expensive, thereby resulting in many factories operating far below their installed capacities.

It was also gathered that as a result of the currency crisis, the prices of essential food items were gradually rising as a direct consequence of the high cost of production and the imported substitutes becoming more expensive.

The naira, which has been taking a beating from the fall in global oil prices since mid-2014, tumbled to 391 against the dollar at the parallel market on Friday and has remained at the Central Bank of Nigeria-pegged 199 to $1 at the interbank market.

On January 11, the central bank stopped the sale of foreign currencies to Bureaux de Change operators as part of measures to reduce the pressure on the nation’s foreign reserves.

Since the announcement was made, the value of naira, which was 283 against the dollar at that time, has been depreciating.

Speaking with our correspondent on the effects of the falling currency on food manufacturers, the Executive Secretary, Association of Food, Beverage and Tobacco Employers, Mr. Aderemi Adegboyega, lamented that hundreds of jobs out of the 40,000 workforce in the sector had been lost already and that those still in employment were hanging on by the thread.

He said the business was no longer profitable and firms in the sector were shutting down because they could not afford to pay the salaries of workers, while producing very little.

“We need forex to buy raw materials as a lot of our companies are producing below capacity, which is a big problem. As we are not manufacturing, it means that some of our employees are going to lose their jobs. In our industry alone, we have about 40,000 jobs, and if care is not taken, there will be a lot of loss in terms of the jobs,” Adegboyega warned.

While analysing the precarious situation in the manufacturing and trade sectors, the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said many organisations were becoming insolvent due to accumulated debts owed foreign suppliers.

Yusuf stated, “Many have slowed down their operations because of lack of forex, and many companies are not able to pay their suppliers abroad; for those who took goods on credit, the situation has created a major credibility problem for them. And because of that, some of them have lost their credit lines.

“Many foreign airlines operating in the country cannot remit proceeds to their home countries. For those who are buying and selling; if they get the money to buy, how are they going to sell? It is a very serious situation.”

Meanwhile, both local and imported food items have become expensive due to the scarcity of dollars and the restrictions placed by the CBN on importers of certain food items from assessing foreign exchange from the official source.

Investigations by our correspondent showed that the prices of packaged water, bread, imported brands of vegetable oil, rice, fish as well as ingredients for making confectioneries had been on a steady rise since the restriction of forex sale was announced in June 2015.

Food retailers at the Ipodo Market, Ikeja, Lagos State, told our correspondent that a carton of ‘Titus’ frozen fish, which sold for N9,000 in June last year, had increased by 33 per cent to N12,000 six months after.

One of the traders, Mrs. Folashade Dasaolu, explained that the price of a carton of croaker fish, being imported from Turkey, had increased by 14 per cent from N14,000 three months ago to N16,000 presently.

“We don’t get as much quantity from our suppliers as we would like to because they have limited stock,” she added.

For imported vegetable oil, the owner of Okikiola Ventures in the same market, Mrs. Abiodun Adefolami, said that a 25-litre container of the product imported from Malaysia was now selling for N8,200 instead of the previous N6,200.

The price of a 50kg bag of rice started a steady ascent from N8,700 in August last year to peak at N10,000 in the middle of November.

Statistics obtained from Novus Agro Nigeria Commodity Index showed that the price of the product started declining when the CBN lifted the ban on rice as part of the items restricted from the official forex market.

The CBN on June 23, 2015 officially stopped the sale of dollars to the importers of 41 items, in its quest to reduce the pressure on the naira as well as preserve the country’s external reserves.

The essential food items included on the list are rice, margarine, palm kernel/palm oil/vegetable oil, meat and processed meat products, vegetable and processed vegetable products, poultry products like chicken, eggs, turkey, and tinned fish in sauce.

A bag of sachet water, which sold for N100 in Lagos in January, now sells for N150, with the manufacturers blaming the high cost of packaging materials for the price increase.

It was gathered that the rise in the price of flour from N6,500 to N7,900 for a 50kg bag; imported fat from N4,500 to N5,200; and sugar from N7,000 to N8,600 per 50kg bag, had made bakers in Lagos to increase the price of a loaf of sliced bread to N250 as against N200 previously.

However, the Chairman, Association of Master Bakers and Caterers of Nigeria, Lagos chapter, Jacob Adejorin, said despite the rise in cost of raw materials, the price of the popular ‘Agege’ brand of bread had not changed.

Adegboyega explained that some of the manufacturers had embraced the backward integration policy as directed by the Federal Government, but that it would take some time before the expected impact could be felt.

Citing examples of companies that had started backward integration, he said, “Flour Mills of Nigeria Plc has a farm that is called Suntil, where it is growing sugarcane and it will eventually be producing sugar. UAC Foods has farms somewhere where it is rearing chicken. Chi Foods also has farms where it is producing concentrates, but the fact is that all these are not enough for their production capacities.”

According to him, FrieslandCampina WAMCO has gone into partnership with herdsmen in Plateau and other states to train them on the type of cow that will produce the quality of milk the company requires and is offering them financial support.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Appointments

Heirs Oil & Gas Announces CEO and Board Appointments

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Tony Elumelu

Heirs Oil & Gas (HHOG), the leading African integrated energy company, has announced the appointment of Osayande Igiehon as Chief Executive Officer, effective May 4, 2021, together with a distinguished non-executive board, bringing together leading industry figures, with considerable global and regional experience.

Heirs Holdings Limited’s (HH) portfolio company, HHOG, completed the acquisition of OML17 in January 2021, in one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1.1 billion. The transaction represents a further implementation of the HH Group strategy of creating the leading integrated energy business in Africa. Through a series of strategic portfolio holdings, HH is executing this strategy. Most recently, affiliate company, Transcorp made a US$300 million acquisition of Afam Power, increasing the Group’s installed electricity generating capacity to 2,000MW.

Mr. Igiehon, who joins from the Royal Dutch Shell (Shell), where he was previously a Vice-President with the Group in the Hague, Netherlands. He brings over twenty-seven years of experience and expertise in the oil and gas sector with Shell, where he held a series of senior management positions. Mr. Igiehon previously served as Chairman and Chief Executive Officer of Shell Gabon, where he led the successful turnaround of the operational, safety and financial performance.

HHOG is also pleased to announce the appointment of the following distinguished private sector and senior industry leaders to the Board:

  • Tony O. Elumelu, CON is the Chairman of Heirs Holdings, the United Bank for Africa (UBA), Transnational Corporation of Nigeria (Transcorp), and Founder of the Tony Elumelu Foundation.
  • Sally Udoma who previously served as general counsel for Chevron Europe, Eurasia, and the Middle East Exploration and Production. Previously, she was general counsel for Sasol Chevron Consulting Limited and managing counsel at the London Legal Service Centre for Chevron Global Upstream and Gas. She has also served as general counsel and general manager for Chevron Nigeria Limited.
  • Anil Dua is a founding partner at Gateway Partners Limited, a private equity fund specialising in dynamic growth markets including Africa, the Middle East and Asia. Prior to this, Mr. Dua worked for over thirty-five years with Standard Chartered Bank in Asia, Africa, Europe and the US, where he held various roles including Regional CEO West Africa and Regional Head of Origination and Client Coverage, Africa.
  • Ahmadu Kida Musa who previously served as Deputy Managing Director of Total Exploration and Production Nigeria Limited, has over thirty-two years of experience in the Oil and Gas industry and brings considerable expertise in Nigerian oil and gas.
  • Stanley Lawson currently serves on the board of Transnational Corporation of Nigeria Plc. He is Managing Partner at Financial Advisory & Investment Consultants Ltd. Dr Lawson previously occupied the position of Group Executive Director-Finance & Accounts at Nigerian National Petroleum Corp.
  • Samuel Nwanze is the Chief Finance Officer at Heirs Oil and Gas. Prior to this he was the Chief Investment Officer at Heirs Holdings responsible for investment and capital management.

Commenting, Mr. Igiehon stated: “HHOG represents an extraordinary opportunity, to create Africa’s first true integrated energy company, with a mission to ensure that Africa’s natural resources are directed toward value creation in Africa, powered by sustainable, robust and abundant African energy. I am excited to join the Heirs Oil and Gas leadership team and look forward to the opportunity to transform the energy sector, purposefully address Africa’s energy needs and improve the lives of people across Africa.”

The Chairman of the Board, Tony O. Elumelu, CON, stated: “I am delighted to welcome our new board members. We are building a role model institution for African businesses and our investment in human capital is a further strong demonstration of our intent. The regional and global expertise of our board members will serve to further drive value creation to our continent, as we execute our goal of becoming Africa’s largest, indigenous, integrated, energy company.”

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Brands

CHI Limited Celebrates Its Maiden Hollandia Dairy Day

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Nigeria’s leading dairy brand, Hollandia, is set to hold the maiden edition of its Hollandia Dairy Day. The event which will be celebrated on the 18th of May 2021 will provide a veritable platform to drive the national discourse on the unrivaled health and nutrition benefits of dairy consumption to people of all ages.

Set to be hosted as a conference, the theme of this year’s event is “Dairy Nourishment to Support Healthy Living”, and it focuses on the vital role dairy consumption plays in our everyday nourishment, its benefit to our overall health, and why dairy products should be included in our diets every day.

This conference, which is designed as a hybrid of the physical and virtual events, will feature presentations, interviews and panel discussions from health experts and nutritionists as they provide insights and share perspectives to guide informed decisions about dairy consumption as part of a daily balanced diet. The event is opened to the public through the brand’s multiple social media platforms.

According to a report by the Food and Agriculture Organisation of the United Nations, 2019, Nigeria has low dairy consumption levels per head – 15 to 20 liters per capita consumption. This is partly attributable to the low purchasing power of the average Nigerian household, who rank milk and dairy products as non-essential luxuries and prioritize other staple foods such as rice, beans, and yam.

By provoking the conversations and stimulating public action/intervention, Hollandia aims to drive consciousness for dairy consumption and its importance to achieving optimum health, and to get many more Nigerians drinking, using, and consuming dairy products.

The past year has presented unprecedented shocks and disruptions, including a global COVID-19 pandemic. As communities throughout the world look for ways to minimize the risk of COVID-19, maintaining and boosting good health is top of mind for many. Dairy foods such as milk and yogurt contain essential nutrients, including Vitamins A and D, Zinc and Protein, which support immune function.

The Hollandia Dairy Day Conference is a public interest initiative created to highlight the importance of dairy in everyday nutrition and healthy living in Nigeria.

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Business

Nokia Launches Blockchain-Powered Data Marketplace For Secure Data Trading and AI Models

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Nokia

Nokia today announced the launch of the Nokia Data Marketplace as-a-service to facilitate secure sharing of data and AI models, enabling digital transformation and data monetization for enterprises.

As data volumes continue to surge, AI and machine learning are increasingly crucial in business decision making. Nokia Data Marketplace is designed to help enterprises and communications service providers (CSPs) use data in strategic decision making, by providing real-time access to massive trusted datasets.

The new service also enables enterprises and CSPs to become data marketplace providers themselves, by monetizing data exchanges between customers or business ecosystem participants.

Nokia Data Marketplace ensures trusted data exchange and authorization mechanisms. This enables a wide range of vertical use cases, including electric vehicle charging, environmental data monetization, supply-chain automation and preventative maintenance powering numerous vertical segments, including transportation, ports, energy, smart cities and healthcare.

Friedrich Trawoeger, Vice President, Cloud and Cognitive Services at Nokia, said: “Our customers need secure and trusted access to data for effective business decision making. With Nokia Data Marketplace, enterprises and CSPs can now benefit from richer insights and predictive models to drive digital ways of working and tap into new revenue streams.”

Nokia Data Marketplace accelerates AI initiatives through federated learning. This approach, combined with orchestration capabilities, facilitates the collaborative development of highly accurate machine learning models for analytics use cases. It also meets the growing demand for a platform that can efficiently apply AI and machine learning algorithms to in situ data.

Nokia Data Marketplace complements Nokia Worldwide IoT Network Grid (WING), which offers global IoT connectivity and vertical applications. For example, Nokia WING’s asset tracking solution is enriched by Nokia Data Marketplace’s blockchain to provide secure and automated data exchange and transactions between logistics’ ecosystem partners for faster turnaround.*

Kaladhar Voruganti, Senior Fellow, Office of the CTO at Equinix, said: “Nokia Data Marketplace combined with Equinix data centers allows organizations to share data and algorithms globally at more than 240 metro edge locations. Our Metal platform augments this to provide secure, proximate, on-demand infrastructure to enterprises and government agencies. Sharing and processing of data close to its point of creation mitigate issues related to latency, compliance, and network backhaul cost. These neutral and secure edge locations are connected via high-speed and secure networks to data sources spanning across public clouds, private enterprise data centers and data brokers.”

Wouter van Neerbos, Chief Executive Officer at Marlin, said: “Through automated data exchange among shipping participants, Nokia brings us the transparency and operational efficiency required in our global marine supply chain. This reduces waiting time for shipping participants in the marine ecosystem, enables faster turnaround for ships, and reduces our costs.”

Justin van der Lande, the Principal Analyst at Analysys Mason, said: “Data is the energy needed to run all future business; critical to their success in creating the best AI-based insights and needs access to the largest data sets. Data sharing between enterprise partners is vital in building complete data sets. Facilitating data sharing using a secure platform, such as Nokia’s blockchain-based Data Marketplace, accelerates enterprises’ building of new data sets and creates richer business partnerships for them.”

Nokia is leading the development of security, privacy, and trust mechanisms as part of a consortium that was recently awarded the DEDICAT 6G project by the European Union. Nokia Data Marketplace inclusion in this project focuses on creating an AI and blockchain-enabled security framework and trust management platform for IoT applications running on B5G (Beyond 5G) networks.

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