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Rice Importation Over in Two years – Danju

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The Managing Director and Chief Executive Officer, Bank of Agriculture, Prof. Danbala Danju, in an interview with journalists, says rice importation will soon end in Nigeria.

What is the Anchor Rice Borrower programme of the current government all about and how will it impact on the nation’s economy?

The Anchor Rice Borrower programme is aimed at boosting domestic production. The country has been importing rice and because of the foreign exchange and the focus of the new administration to try to convince Nigerians to go into farming, the Central Bank of Nigeria and Bank of Agriculture came up with the Anchor Rice Borrower programme.

In the case of Kebbi State, we have pilot programmes because some of the commercial banks did not consider this as profitable. The Bank of Agriculture is the best place to be because it is a specialist agricultural development bank that is over 42 years old and has more than 137 branches across the 36 states of the federation.

So we started the Anchor Rice Borrower programme with the aim of supporting farmers to boost domestic production of rice. Kebbi as a whole is made up of about 75 per cent farmers with about 98,000 hectares of land.

Each farmer has a budget of about N210,000 per hectare disbursement, which is in two forms and largely, they are given inputs like seeds, fertiliser, pumps and about N49,000 as working capital. Then you have to consider labour for land preparation and day to day management of the rice production. Not all the 75,000 farmers we targeted collected the average amount of N210,000 per hectare because some of them had their water pumps or other inputs. But on the average, each of the farmers was targeted to receive N210,000 in estimated cost of cultivation of a hectare of paddy during the dry season. We targeted to have more than 300,000 metric tons of rice being produced over the dry season period.  And because of the success of the pilot scheme in Kebbi, the Federal Government has directed that we work closely with the Central Bank of Nigeria to target about 13 states in the programme as well as in wheat production, tomato and other staple crops.

Primarily for now, the focus is on rice to help achieve the current objective of self sufficiency in domestic rice production in about one to two years which President Muhammadu Buhari has promised the country. The Bank of Agriculture is the main implementing agency. We have our workers, who are being spread all over the country, particularly in the 13 states of the federation. We are targeting different heritage farmers to achieve domestic sufficiency in rice and other crops. In a couple of weeks, we are targeting about 300,000 farmers that would be supported under the programme to produce paddy. We are entering into some agreements with off-takers, largely private sector millers, and in some cases, state governments.

You said that the programme is meant for small scale farmers, how do you ensure that the big time farmers do not hijack it?

There is a farmers’ registration. All the farmers had to register with the Bank of Agriculture. We have to collect their biometric and in addition to that, we issued them with BVN so that we can have the identity of the farmers. The target is for the small scale farmers who have an average farmland of one hectare to a maximum of five hectares. This is what we have been doing and this is what we are going to do. There is a private company that is partnering with our bank to properly register and identify the farmers to avoid duplication.

For the large scale famers, we are coming up with a special facility for them under a new arrangement for funding agriculture in our country. They have a different interest structure; it is a different instrument that we are using. Under the programme, we are largely targeting the smallholder farmers. Like I have said, there is a rigorous identification system, which requires farmers to register with our branches, and they need to have BVN before they can be given inputs in terms of seeds, fertilisers as well as working capital. So far, it has been quite successful and that is why we are trying to replicate it in other parts of the country.

How has the programme been received in crises prone areas like the North-East and recently the Niger-Delta?

We did not start at once in all the states of the federation; we started in Kebbi and we learnt from that. We are now strategising on how to target 13 states of the federation with respect to rice. The lessons are very clear from Kebbi; we need robust farmer identification. In the past, people would collect money and then divert it for other purposes; this time round, we are disbursing mainly in kind. We give farmers high quality seeds, pesticides, fertilisers and some kind of training to make sure they adopt the correct agronomic practices in order to have the expected yields.

Traditionally, they used to have one ton of paddy per hectare, but with the new high seeds given to them as well as better agronomic practices, they now could have five tons per hectare, which is an improvement. So they are able to make lots of money. They can now pay us back and we can recycle to reach more farmers.

So, what we have started with is the pilot programme, which is now going to be scaled up in all the states of the federation that have comparative advantage in rice production.

You talked about measures to avoid diversion of funds, but what are you doing to prevent the diversion of produce?

In the past, people would have been given N210,000 per hectare, asked to buy their inputs, do what they want and then come back and pay. Now, under the current programme, we don’t pay farmers directly. Before we give money to farmers, we first have to identify who the farmers are. And once farmers are identified, they register with the bank and there is a committee made up of our representative, farmers’ representatives – the Rice Farmers’ Association of Nigeria, and the off-takers, so that we identify who the farmer is. We have got quality inputs and other seeds company that supply farmers with high quality inputs. So this way, we don’t give money, we give farmers the inputs they need and the inputs are high quality from very quality sources.

The only money we give them is largely about one-fifth of the amount, which is for land clearing, preparation, weeding and transportation. And the money is also given out in instalments; we don’t give all at a go. There are stages; we have the land preparation stage and planting stage. We don’t also give the inputs at once. For instance, fertilisers or pesticides are given at different stages in the production process. So, it is a controlled process.

Do you think this programme is sustainable?

The sustainability of this programme, first of all, is in the module. For a programme to be sustainable, it has to be financially profitable. Farmers in the past had no guaranteed source of credit, now if you’re registered with the Bank of Agriculture, you’ll have the credit to produce your paddy. In the past, they had no guaranteed market, no off-takers. So now that they are registered and they have a ready-made market, the ban on importation of rice makes it very lucrative for them (farmers).

We hope that the Federal Government would sustain the ban on importation of rice because if you open the gate to importation of cheaper and subsidised rice from other economies, it will undermine the profitability of existing rice mills and in turn the profitability of the out growers. So, we hope that the issue of ban on importation of rice would be sustained, and also issues of exchange rate will be handled well. Curiously, an overvalued exchange rate makes it cheaper to import rice, but if we allow for a more realistic pricing of foreign currency or a more appropriate value for the naira, it is good for farmers because instead of importing, they will be encouraged to produce more.

Also, I think there is the question of infrastructure. As we are producing rice currently, the productivity must be enhanced. In this case, more research in terms of output of the seeds. We need high yielding seed varieties of rice and we also need to provide the irrigation, transport infrastructure and the capacity of existing rice mills need to be expanded and new ones established. If we are able to implement all these measures, I think not only will we be able to achieve domestic self-sufficiency but we will also be able to export to other countries in less than two years.

How much are you giving out in the project?

We started during the last dry season, but I can’t give you the total figure. After the pilot scheme in Kebbi, we are now planning to go to the 13 states of the federation and we have a target number of about 300,000 farmers. If you have 300,000 farmers on an average price of about N180,000 per hectares, you can see the amount we are requesting for. We are requesting for huge funds from the Central Bank of Nigeria so that we can support the small scale farmers. We also plan to request for some money from the Central Bank of Nigeria to support large scale farmers. Simply, we are working with different states to identify the target number of farmers in each of the states. And on the basis of this agreement with the Central Bank of Nigeria, we will request for funding. We have been assured by the CBN that once we present the list of farmers with BVN, we’ll be supported with the requisite sum of money.

Is the programme only meant for dry season farming?

No, it is not. Now, we have started with dry season, we’re going into the wet season. For the wet season, in the next couple of weeks, we are targeting 300,000 farmers. After the wet season, we are planning for the dry season. So, it is going to be for both wet and dry seasons.

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.

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Economy

Remittances To Africa Projected to Drop By 5.4% in 2021: UNECA

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According to a new report from United Nations Economic Commission for Africa (UNECA), remittances to Africa are projected to drop by 5.4 percent to $41 billion in 2021 from $44 billion last year.

The report notes that the bleak situation has been compounded by the high cost of sending money to Africa from abroad, as the cost of remittances to Africa remains the highest in the world at 8.9 percent.

Remittances are an essential part of economic activity in low and middle-income countries (LMIC), including Africa. Due to the economic crisis induced by the COVID-19 pandemic and shutdown, global remittances are projected to decline sharply by about 20 percent in 2020. For Africa, remittances are projected to drop by 5.4 percent to $41 billion in 2021 from $44 billion last year, according to a new report by the United Nations Economic Commission for Africa (UNECA) projects remittances.

The report, titled “African regional review of the implementation of the Global Compact for Safe, Orderly and Regular Migration”, notes that the projected fall is mainly due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages amid the pandemic.

The report adds that the bleak situation has been compounded by the high cost of sending money to Africa from abroad as the cost of remittances to Africa remains the highest in the world at 8.9 percent.

“A migrant sending $200 to his/her family in Africa pays an estimated nine percent of the value of the transaction, indicating that the continent is still far from achieving the three percent target set out in Sustainable Development Goal 10,” the report stated.

This signals huge deficits in millions of African households depending on their friends and relatives abroad for a financial lifeline, thus threatening a perpetuation of macroeconomic imbalances on the continent.

The Addis Ababa Action Agenda of the Third International Conference on Financing for Development and Sustainable Development Goal indicator 10(c) provides that countries should, by 2030, reduce to less than three percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than five percent.

In response, some African countries have taken action to lower the costs of remittance transfers by offering diaspora bonds to investors and relaxing foreign exchange controls to allow for electronic and mobile money transfers at reduced costs.

“It should be noted, in that regard, that the use of digital money transfer platforms reduces transfer fees in Africa by an average of 7 percent,” says the report.

“Private financial institutions also offer incentives to encourage members of diaspora communities to use their services, including low transaction fees for remittances, and facilitate diaspora-initiated projects, especially in the real estate sector. These measures all promote the financial inclusion of migrants and their families.”

The report recommends that member States support migrants and their families through adopting laws and regulations to facilitate the sending and receiving of remittances, including by fostering competition among banks and other remittance handling agencies to establish low-cost transfer mechanisms.

In addition, the report recommends that African countries make every effort to reduce the transfer costs associated with remittance payments by making more extensive use of digital transfer solutions, such as MPESA, and by streamlining the regulatory constraints associated with international money transfers.

Finally, the report concludes that the African States should also engage with destination countries to identify ways to enhance the provision of basic services to migrants in those countries as remittances are a primary source of national income for at least 25 African countries, all of which have large diaspora populations.

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Nigeria’s Inflation Rate Declines to 17.01 Percent in August 2021

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Prices moderated further in Africa’s largest economy, Nigeria, in the month of August despite rising costs and growing economic uncertainties.

Consumer Price Index (CPI), which measures inflation rate, grew by 17.01 percent year-on-year in August 2021, representing a 0.37 percent decrease when compared to the 17.38 percent recorded in the month of July 2021.

On a monthly basis, inflation rate increased by 1.02 percent in August 2021, slightly higher by 0.09 percent than the 0.93 percent filed in July, the National Buruea of Statistics (NBS) stated in its latest report.

Prices of goods and services continued to drop on paper in recent months even as costs are hitting record highs across most sectors in Nigeria.

Naira has plunged to a record-low against the United States Dollar and other global currencies following the Central Bank of Nigeria’s decision to halt sale of forex to Bureau De Change Operators in an effort to curb illicit financial flows and forex supplies to the black market.

Naira plunged to N560 per United States Dollar at the black on Wednesday to set a new record low against the greenback and subsequently dragged on cost of import goods and profit of import dependent businesses.

Food Index also rose at a slower pace in August 2021 even with Nigerians complaining of over 50 percent increase in the price of food items. Food composite index rose by 20.30 percent in August, at a slower pace when compared to 21.03 percent recorded in the month of July 2021.

The rise in food index were caused by increases in prices of Bread and cereals, Milk, cheese and egg, Oils and fats, Potatoes, yam and other tuber, Food product n.e.c, Meat and Coffee, tea and cocoa, according to the NBS report.

On a monthly basis, the food sub-index grew by 1.06 percent in August 2021, representing an increase of 0.20 percent from 0.86 percent filed in the month of July 2021.

Looking at a more stable food index guage, the twelve-month period ending August 2021 over the previous twelve-month average, food index increased by 0.34 percent from 20.16 percent achieved in July 2021 to 20.50 percent in August 2021.

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Glo to Reconstruct 64km Ota-Idiroko Road Using Tax Credit Scheme – Fashola

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Tax Credit - Investors King

Mobile telecommunications giant, Globacom, has offered to reconstruct the 64 km Ota-Idiroko road in 2022, using Federal Government’s Tax Credit Scheme.

The Minister of Works and Housing, Mr. Babatunde Fashola, announced this on Wednesday during an inspection tour of the ongoing reconstruction of the Lagos-Ibadan Expressway.

“From Ota to Idiroko, we don’t have a contract there, but Chief Mike Adenuga of Globacom has offered to construct that road using the tax credit system.

“So, that has also started, they are doing the design, and hopefully, by sometime early next year, they should mobilize to site. The real reconstruction is going to happen if we have a deal with Glo,” Fashola said.

He said that FERMA would carry out rehabilitation works on the Ota-Idiroko road between October and December.

“But between now and December, FERMA has gone to take measurements there and they will move there from the end of September if the Ogun State Government does two things.

“Clear all the squatters, traders, and the settlers on the road and help us manage traffic and the governor as at last night has committed to doing that for us,” the minister said.

He said efforts were on to bring in Flour Mills of Nigeria Plc and Unilever to reconstruct the Badagry link to the Lagos-Ota-Abeokuta road under the Tax Credit Scheme of the Federal Government.

The minister said that the Lagos-Ota-Abeokuta road had become a problematic road due to years of neglect by previous administrations, as such the highway required a huge investment.

He commended Gov. Dapo Abiodun for his passion for fixing roads in Ogun State, adding that the reconstruction of the failed portions of the Lagos-Ota-Abeokuta road would be completed by December at the cost of N13. 4 billion.

The minister added that the project would be handled by the Federal Road Maintenance Agency (FERMA).

He called on federal lawmakers representing Lagos and Ogun States to ensure increased budgetary allocation for the roads to ensure their speedy completion to ease the hardship on road users.

“When people say Fashola is looking away, I am not looking away, I just can’t find the money,” he said.

He also called for support of citizens for parliamentarians to ensure more borrowing for infrastructure upgrades because the future depends on development strides today.

Also speaking during the inspection tour, Gov. Dapo Abiodun of Ogun said that the project became necessary because Ogun is the industrial hub of the nation that needed good roads for interconnectivity to boost commerce.

He said: “We have given the commitment that we will relocate traders, we will control and manage traffic, whatever that it is we need to do, we will ensure that we begin to bring succor and needed relief to our people.

“The state of that road today is pitiable. I went on that road myself and I felt bad for our citizens.”

Abiodun said the state government was ready to borrow to reconstruct the Lagos-Ota-Abeokuta Road should there be a delay in the Sukuk funding for the highway.

“If this Sukuk bond would not happen immediately, the state government is willing to go and borrow against that promise so that we can mobilize the contractor,” he said.

He thanked Fashola for the efforts to reconstruct roads in the state and pledged the support of the state government in fixing the highways.

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