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Osinbajo: Farmers to Secure Credit at Single Digit from Bank of Agriculture

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Vice President Yemi Osinbajo

Vice President Yemi Osinbajo monday said efforts were being made to ensure that farmers secure financing from the Bank of Agriculture (BoA) at single digit interest rate in a determined move to boost agriculture as part of government’s diversification strategy.

He said the Federal Ministry of Finance had practically concluded plans to recapitalise and re-engineer the BoA adding that the bank should be ready to give single digit rates by the end of the quarter.

He said with the current double digit interest rate and reluctance by commercial banks to lend to agriculture, there was need to develop alternative model for financing the sector in the short term.

He said the Central Bank of Nigeria’s (CBN) Anchor Borrower programme has been useful and had recorded huge successes in local rice and wheat production through the provision of loans at single digit.

Speaking yesterday in Abuja at the unveiling of the “Green Alternative: the Agriculture Promotion Policy 2016-2020” which is a four-year blueprint on growing the sector, he said repositioning agriculture was critical for economic transformation.

He said the sector would not only be revived to achieve food security but also have the capacity to produce and export to earn foreign exchange.

He said the inability of past administrations to adhere to policy direction and the unbridled importation of items which ought to be produced locally, coupled with high interest loans to farmers were some of the major drawbacks to the development of the sector.

He said the current administration inherited a near colapse economy and had to take far reaching decisions to reposition it.

According to him, one of the most critical component of the plan was to position agriculture as arrow-head of its recovery efforts.

“There’s no question at all that if we get agriculture right, we will get our economy right,” he said.

He added that the roadmap identified the inability to meet domestic requirements which is more of productivity challenge as well as inability to export at levels required or market success adding that the Green Alternatives will solve the challenges.

He said: “You cannot have a policy of encouraging local production of food and on the other hand, have a high tarrif on imported agricultural equipment. There’s no way that we can encourage local production when we allow unbridled importation of the same thing that we are trying to produce.

“There’s no way we can do the scale of agricultural production both for domestic consumption and export without ensuring local improved seedling development alongside those that we import. And of course, encouraging the works of the agents of the ministries of science and technology who have been making great breakthroughs in local development of agricultural equipment.”

Osinbajo said as part of the 500,000 teachers that federal government plans to recruit, about 100,000 will be trained as extension workers for the farms.

He commended the Minister of Agriculture and Rural Development, Mr. Audu Ogbeh, for what he described as his unbridled advocacy for a new policy on agriculture and for also spearheading the policy development within a short period.

Nevertheless, Ogbeh thanked both President Buhari and Osinbajo for their support in ensuring that a blueprint on agriculture was developed.

The minister said the new document was not entirely new as it was built upon the Agricultural Transformational Agenda (ATA) of the previous administration.

He maintained that the present administration had no intentions to jettison good ideas from the past regime noting that policy summersaults were often costlier than new initiatives.

He said adjustment would be made to past administration’s policies where necessary.

He expressed confidence that with the recent interventions, “It won’t be long before we begin to cruise to reasonable altitude.”

He said government would work with state governments to put over 200 dams located across the country into use.

He added that stakeholders would now be expected to use only duly certified fertilizers by government as well as adhere to advisory of soil conditions for bumper yields.

The federal government has already invested massively in soil mapping/testing aimed at increasing crop yields.

He said adequate security arrangement was being put in place to shield local and foreign investors into agriculture from the snares of armed robbery and kidnapping.

On the new policy document, Ogbeh said there had been no alternative to oil and gas in the past 30 years while agriculture had totally been relegated, a situation which according to him led to annual food import bills at a historic $22 billion.

He said given Nigeria’s population projection, the government cannot continue to subsidise feeding, adding that “We have to feed or perish.”

He said tales of widespread hunger will be brought to an end as government expects bumper harvest this year, bouyed by innovations in fertilizer utilisation and education of farmers on new ways of doing things.

Essentially, the new 129-page policy document produced by the ministry of agriculture after extensive consultations with stakeholders, among other things, targets three key pillars including productivity enhancements, crowding in private sector investment and institutional strengthening/realignment.

The key objectives is to grow the agricultural sector to between six to and 12 per cent annually; doubling agricultural household incomes in 6 to 12 years and integrating agricultural commodity value chains into the broader supply chain.

Other immediate targets are to drive job growth and wealth creation as well as ensuring enhanced capacity for foreign exchange earnings.

The six focal areas of intervention include institutional setting and roles, youth and women, infrastructure, research and innovation, and food and national security as well as climate smart agriculture.

He said currently, government’s drive towards food security is in progress particularly for rice, maize, sorghum, millet, wheat, and animal products and tomato paste.

The minister added that the new policy would further educate the people on how to keep bees which are critical for pollination of farm produce particularly tomatoes.

He also said government is presently addressing the issues around cattle rearing and the incessant conflicts with farmers, adding that it is also working with state governments to secure the grazing reserves for herdsmen, a situation that could limit movement and reduce confrontations.

Ogbeh said government’s focus was also to promote commercial agriculture to go side by side with subsistence farming in order to boost exports.

He said a lot of investments would go into palm oil and lemon grass oil productions for export.

He said the new document will also require all undergraduates in tertiary institutions to own farms on campus.

The minister lamented that the 774 local government areas in the country have almost collapsed when it comes to agriculture, stressing that they all must be brought back into the system.

He said whatever the problems of local government are they must be productive or better scrapped.

He, therefore, enjoined every Nigerian to take to farming to save the ailing economy while assuring them of government support.

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

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Crude Oil

Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

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Crude Oil

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

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Crude Oil

Oil Prices Edge Higher Amidst Fear of Middle East Conflict

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Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

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Commodities

Geopolitical Uncertainty Drives Gold Prices Higher Despite Fed Rate Cut Concerns

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gold bars - Investors King

As tensions simmer in the Middle East and concerns loom over Federal Reserve policy, gold continues its upward trajectory, defying expectations and reinforcing its status as the ultimate safe-haven asset.

The latest surge in gold prices comes amidst escalating geopolitical tensions in the Middle East.

Reports suggest that the United States and its allies are bracing for potential missile or drone strikes by Iran or its proxies on military and government targets in Israel. Such a significant escalation in the six-month-old conflict has sent shockwaves through financial markets, prompting investors to seek refuge in gold.

Despite initial setbacks earlier in the week, gold resumed its blistering rally, buoyed by the specter of geopolitical uncertainty.

On Wednesday, the precious metal witnessed its most significant decline in almost a month following a hotter-than-expected US inflation readout.

This unexpected data led traders to recalibrate their expectations for Federal Reserve interest rate cuts this year, causing the yield on 10-year Treasuries to surge above 4.5%.

However, gold’s resilience in the face of shifting market dynamics remains remarkable. Even as concerns mount over the Fed’s rate-cutting trajectory, the allure of gold as a safe-haven asset persists.

Prices hover just shy of a record high reached earlier in the week, propelled by robust buying from central banks.

Market analysts interviewed by Bloomberg anticipate further gains in gold prices, citing continued geopolitical tensions and strong momentum in the market.

The precious metal’s near-20% rally since mid-February underscores its enduring appeal as a hedge against uncertainty and inflationary pressures.

At 9:54 a.m. in Singapore, spot gold rose 0.3% to $2,341.58 an ounce, signaling continued investor confidence in the metal’s resilience.

The Bloomberg Dollar Spot Index, meanwhile, remained relatively unchanged near its highest level since November.

Silver, often considered a bellwether for precious metals, held steady after reaching a three-year high, while platinum and palladium also registered gains.

As the world navigates through a complex web of geopolitical tensions and economic uncertainties, gold remains a beacon of stability in an increasingly volatile landscape.

Its ability to weather market fluctuations and maintain its allure as a safe-haven asset reaffirms its timeless appeal to investors seeking refuge amidst uncertainty.

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