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China Seeks Better Partnership With NCS

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Nigeria Customs Service

The Peoples Republic of China has expressed her readiness to seek deeper partnership with the Nigeria Customs Service (NCS).

Stakeholders in the maritime industry have averred that a collaboration between the world most populous nation and African most populous country is expected yield more benefits that would leverage on the existing bilateral ties both countries.

The Deputy Consulate General of China in Nigeria, Mr. Li Yong stated this in Lagos when he paid a courtesy call on the NCS Zonal Coordinator, Zone ‘A’, Lagos, ACG Eporwei CB Edike.

In furtherance of this partnership, Yong who represented the Consulate General, requested for an interactive forum between the NCS and the People’s Republic of China in Nigeria to enable them have more knowledge on import and export laws and regulations.

The training, he said will improve their knowledge of Customs import and export laws and regulations and so reduced friction between the NCS and the Chinese traders in Nigeria.

Yong expressed his happiness over his meeting with NCS, pointing out that he was glad to meet the Zonal Coordinator and the management of Zone ‘A’.

According to him, he sincerely believed that the visit will deepen the relationship between the peoples of Republic of China and Nigeria.

The Zonal Coordinator in his response thanked the Deputy Consulate General for the visit and appreciated his effort in seeking for an interactive session to educate his people in Customs Import and Export laws and regulations.

“This will go a long way in trade facilitations and revenue generation which is one of the customs mandate”, he said.

On the issue of interactive forum, the Zonal Coordinator promise to forward the Deputy Consulate General request to the Comptroller General of Customs (CGC), Colonel Ibrahim Hameed Ali (retired) for permission to organize the session.

Edike in his response said that the visit is very important and will enhance the already existing bilateral trade investments between Nigeria and the Peoples Republic of China.

He also stressed the fact that the role of NCS cannot be over stated as the country’s economy is experiencing deep adjustments and low growth.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Economy

FG Instructs DBN to Increase Funding Towards MSMES Following The Global And Domestic Disruptions

The federal government of Nigeria has directed the Development Bank of Nigeria (DBN) to step up its efforts to increase its funding for MSMEs.

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Global Banking - Investors King

The federal government of Nigeria has directed the Development Bank of Nigeria (DBN) to step up its efforts to increase its funding for MSMEs.

Following the impact of the Russian-Ukraine war that has disrupted business activities in different countries across the world, Micro Small and Medium Enterprises (MSMEs) during this period have continued to face increased difficulties.

Noting that MSMEs occupy a critical part of the Nigerian economy and contribute 48 percent to Nigeria’s GDP, the FG has demanded the DBN to expand its funding windows to provide affordable financing to a wider cross-section of MSMEs.

In a response to the demand of the federal government, the Managing Director of DBN Dr. Tony Okpanachi while speaking at DBN’s 3rd annual lecture series with the theme: “Thriving in the Face of Domestic and Global Disruptions”, assured that despite the adverse effect of domestic and global disruptions on MSMEs in Nigeria, the bank would continue to empower and drive the critical sub-sector of the economy to deploy innovative strategic solutions in the management of their businesses.

The Bank also assured of its continuous partnership with its Participating Financial Institutions (PFIs) to eliminate the financing constraints faced by MSMEs.

His words, “In Nigeria, we’re currently plagued with rising inflation of 20.52% (as of September 2022). We are as well afflicted with rising food and commodity prices, coupled with the rising and unstable exchange rates among others.

“The effects of Global disruption on international trade often come as a shock to businesses. These series of events have led to uncertainty and radical changes to companies’ well-established strategies across the globe and MSMEs are not exempted.

“The future of work is currently in a state of flux, with many old and new challenges hitting MSMEs particularly hard. Hence, Governments, corporate bodies, and individuals, mostly MSMEs must find ways to adapt to the changing times and the volatility of the market, deal with uncertainty, and figure out how to convert that into opportunities.”

The Development Bank of Nigeria (DBN) was conceived by the Federal Government of Nigeria (FGN) in collaboration with global development partners to address financing constraints faced by MSMEs and small Corporates in Nigeria.

The bank has successfully disbursed over N512 billion in loans to no less than 225,000 Micro, Small, and Medium Scale Enterprises (MSMEs) in Nigeria since it was established five years ago.

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Economy

Agriculture Well Below its Potential

Agriculture remains integral for developing economies, capable of stimulating growth across the non-oil economy via its broad potential value-chain interlinkages.

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Corn, Soybeans Decline As Favorable Weather May Boost U

Agriculture remains integral for developing economies, capable of stimulating growth across the non-oil economy via its broad potential value-chain interlinkages.

The latest national accounts released by the National Bureau of Statistics (NBS) show that agriculture accounted for c.23% of total GDP. On a y/y basis, the sector grew by 1.2% y/y in Q2 ’22, compared with 3.2% in the previous quarter. Within the sector, crop production grew by 1.5% y/y and accounted for 90% of agriculture GDP. The forestry and fisheries segments grew by 1.3% y/y and 0.9% y/y respectively.

However, livestock contracted by -2.9% y/y.

Over the past eight quarters, agriculture has grown by an average of 2.2% y/y. The agricultural sector has been a beneficiary of substantial credit interventions by the CBN and state-owned development banks. At its July meeting, the CBN/MPC disclosed that total disbursements under the Anchor Borrowers’ Programme (ABP) amounted to N1trn as at end-July ’22, distributed to c.4.2 million smallholder farmers across the country.

Furthermore, the total disbursements under the Commercial Agriculture Credit Scheme (CACS) amounted to N744bn for 678 projects in agro-production and agro-processing. The CACS is among the better performing credit intervention programmes, given its positive repayment outcome (currently estimated at c.N700bn). Meanwhile, for ABP only 40% of mature loans have been repaid.

The misalignment between the growth figures recorded in this sector and intervention efforts can be partly attributed to the large informal economy, which is estimated to represent c.50% of the economy. The formalisation process is partly hampered by absence of bank accounts (by an estimated c.40% of Nigerians).

Given the rural nature of agriculture, a significant number of farmers are unbanked. This contributes to the difficulties in accessing funds. The CBN is gradually winding down special intervention funds, except those that are tagged as critical (relating to SMEs and the power industry). This points towards gradual tapering to maintain the price stability mandate.

It is worth highlighting that the sector is still saddled with unresolved insecurity and structural challenges that undercut investments. Some of these structural challenges include poor storage facilities, poor transport networks, low technology, among others. These challenges contribute to the risk-averse posture of some banks with regards to providing credit to players within the agriculture sector.

Although there have been laudable interventions by the CBN and the FGN, the sector still requires investments. Based on the latest data from the CBN, credit to the agricultural sector accounted for just 6.1% of total credit to the private sector, compared with sectors such as trade/general commerce (7.1%), finance, insurance and capital market (8.6%), oil and gas (16.1%) as well as manufacturing (17.4%) in August ‘22.

Based on another data source, the NBS, agriculture accounted for 3.7% (USD57.4m) of total capital importation in Q2 ’22 compared with 3.3% (USD28.9m) recorded in the corresponding period in 2021. This is an increase of 99% or USD28.5m.

To encourage increased investments into the sector, financial institutions should consider innovative financing solutions targeted at active players across the agricultural value chain. This should boost returns and profitability as well as stimulate economic activity within the sector.

Regarding trade, agriculture exports accounted for 2% of total trade, declining by -30% q/q to N371bn in Q2. We note that cashew nuts in shell, sesame seeds, standard quality cocoa beans, shelled cashew nuts, and natural cocoa butter featured as top export products in Q2 ‘22.

However, agricultural exports have remained below 5% of total exports over the past five years. There is still vast room to boost agro-related exports. This can be achieved through sustainable public-private partnerships that can potentially transform the agriculture sector to ensure that it realises its potential.

In addition, a boost to export receipts should assist with fx revenue diversification and by extension, support overall GDP growth.

As for agriculture imports, it accounted for 9% of total trade, growing by 5% q/q to N464bn in Q2. The growth in imports is unfavourable for imported food inflation. As at August, imported food prices is 17.9%, increasing by 54bps YTD. On the back of supply-chain constraints exacerbated by the Russia-Ukraine crisis, prices of some agriculture commodities have spiked. Notably, the prices of maize and wheat have increased by 20% and 19% respectively YTD.

The Africa Continental Free Trade Area (AfCFTA) agreement should support agricultural activity, create new regional markets for farmers and strengthen the agro-value chain. However, there should be increased focus on value chain interventions, especially around agriculture commodities that the Nigeria has comparative and competitive advantage.

Furthermore, to boost agricultural exports, there is a need to improve quality of products to meet and/or exceed the global standard. This can be achieved through sensitisation programmes geared towards educating exporters across the country. This should assist with solving poor packaging, and high level of chemicals (in the case of agricultural produce), improper labelling, insufficient information on nutritional content, presence of high level of pesticide residue, among others.

Overall, agriculture can potentially drive economic diversification in Nigeria. Improving the agriculture sector requires stakeholders to adopt a longterm view and commit to short-term sacrifices beneficial to expanding the sector.

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Economy

Nigeria Has Lost N531 Million on The Suspended Abuja to Kaduna Train Service

Federal Government has lost about N531 million in revenue on the suspended Abuja to Kaduna train service. 

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Lagos-Ibadan Train Services - Investors King

Federal Government has lost about N531 million in revenue on the suspended Abuja to Kaduna train service. 

The Managing Director, Nigeria Railway Corporation (NRC), Mr Fidet Okhiria disclosed that the country has lost N531 million between March 28 when terrorists attacked Abuja to Kaduna train to September 2022. 

Okhiria noted that the money would have been remitted to the federal government. 

It would be recalled that terrorists unleashed an attack on the Abuja to Kaduna trail which led to the death of eight passengers. About 41 others were injured while scores were kidnapped.

Although some of those that were kidnapped have been released, about 22 are still in the den of the terrorists. Reports had it that about 970 passengers were onboard the train during the attack. 

In response, the Nigerian Railway Corporation halt service along the Abuja to Kaduna train corridor. 

According to the Managing Director of NRC, while speaking to newsmen in Lagos, he said the corporation will not resume service on Abuja to Kaduna rail until all those who remain with the terrorist are released. 

The Managing Director further disclosed that four members of the railway corporation are among those still held captive. 

He, however, expressed optimism that all those still in captivity will soon be released. He noted that the Minister of Transportation is leading the struggle for the safe release of those still in captivity. 

Meanwhile, the federal government has set up a committee to ensure maximum security for train passengers and all train facilities.  The committee is to liaise with the appropriate ministries and agencies to fine-tune a safer railway system. 

“We are talking about present-day technology so that we can have real-time monitoring. We will also be deploying a lot of security agencies to be at strategic locations”.

Some of the places the committee has visited include the office of the Inspector General of Police(IG) and the Ministry of Information.

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