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African Economies Gain from Agriculture Investment

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African countries that took early action in the past decade to invest in agriculture have reaped the rewards, enjoying higher economic growth and a bigger drop in malnutrition, a major farming development organisation said yesterday.

The report by the Alliance for Green Revolution in Africa (AGRA), according to Reuters, showed that after decades of stagnation, much of Africa has enjoyed sustained agricultural productivity growth since 2005. That has helped push down poverty rates in places like Ghana, Rwanda, Ethiopia and Burkina Faso, it added.

Countries that adopted the policies promoted by the Comprehensive Africa Agriculture Development Programme (CAADP) not long after it was created by African Union governments in 2003 saw productivity on existing farmlands rise by 5.9 to 6.7 per cent per year, the report said.

That helped spur a 4.3 per cent average annual increase in gross domestic product (GDP).

By contrast, states that sat on the sidelines saw farm productivity rise by less than three per cent a year and GDP by only 2.2 per cent, said the Africa Agriculture Status Report 2016.

“The last ten years have made a strong case for agriculture as the surest path to producing sustainable economic growth that is felt in all sectors of society – and particularly among poor Africans,” AGRA President Agnes Kalibata said in a statement.

Growth in agriculture is more effective at cutting poverty than growth in other sectors in sub-Saharan Africa because farming is a main source of income for more than 60 per cent of the labour force, and will continue to be a major employer in most countries for a decade or more, the report noted.

On malnutrition, countries that were quick to put the CAADP into practice experienced an annual average decline of 3.1 per cent, while those that did not sign up saw a drop of only 1.2 per cent.

The countries adopting the programme early – between 2007 and 2009 – were Benin, Burundi, Cape Verde, Ethiopia, Gambia, Ghana, Liberia, Mali, Niger, Nigeria, Rwanda, Sierra Leone and Togo, according to the report.

“Africa is no longer in the dark. It has done a lot towards agricultural transformation in the past decade,” AGRA’s head of monitoring and evaluation and a lead author of the report, David Ameyaw said.

“But there is a need to double the effort by 2030 for a meaningful agricultural transformation,” he told the Thomson Reuters Foundation.

The report, released to inform discussions at the African Green Revolution Forum in Nairobi this week, noted that gains were made in early-moving African countries even if their governments did not hit a target set by the CAADP to allocate 10 percent of national budgets to agriculture.

Only 13 African countries have met or surpassed that goal, the report noted. If others followed suit, public funding for agriculture across Africa would rise from $12 billion – the amount allocated in 2014 – to $40 billion, it added.

Agriculture in Africa is still threatened by low productivity due to limited use of inputs like improved seeds and fertilisers, rising water stress, and climate-related disasters such as floods and droughts that are affecting crop, livestock and fish production, according to the report.

A 2014 World Bank study found that around two-thirds of small-scale farmers surveyed in Ethiopia, Malawi, Niger, Nigeria, Tanzania and Uganda did not use chemical fertilisers.

There is a need for such farmers to invest further in irrigation, both studies said, with the World Bank estimating that only 1 to 3 percent of land cultivated by smallholders in sub-Saharan Africa is irrigated.
Ameyaw said further agricultural progress in the region would require political will, the right policies and technology transfer to improve productivity and reduce post-harvest losses.

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.

Economy

COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday

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Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.

Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.

The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.

OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.

This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.

Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.

The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.

President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.

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Economy

Seyi Makinde Proposes N266.6 Billion Budget for Oyo State in 2021

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The Executive Governor of Oyo State, Seyi Makinde, has presented the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly on Monday.

The proposed budget titled “Budget of Continued Consolidation” was said to be prepared with input from stakeholders in all seven geopolitical zones of Oyo state.

Governor Makinde disclosed this via his official Twitter handle @seyiamakinde.

According to the governor, the proposed recurrent expenditure stood at N136,262,990,009.41 while the proposed capital expenditure was N130,381,283,295.63. Bringing the total proposed budget to N266,6444,273,305.04.

The administration aimed to implement at least 70 percent of the proposed budget if approved.

He said “The total budgeted sum is ₦266,644,273,305.04. The Recurrent Expenditure is ₦136,262,990,009.41 while the Capital Expenditure is ₦130,381,283,295.63. We are again, aiming for at least 70% implementation of the budget.”

He added that “It was my honour to present the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly, today. This Budget of Continued Consolidation was prepared with input from stakeholders in all seven geopolitical zones of our state.”

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World Bank Expects Nigeria’s Per Capita Income to Dip to 40 Years Low in 2020

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The World Bank has raised concern about Nigeria’s rising debt service cost, saying it could incapacitate the nation from necessary infrastructure development and growth.

The multilateral financial institution said the nation’s per capita income could plunge to 40 years low in 2020.

According to Mr. Shubham Chaudhuri, Country Director for World Bank in Nigeria, the decline in global oil prices had impacted government finances, remittances from the diaspora and the balance of payments.

Chaudhuri, who spoke during the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Government, said while the nation’s debt is between 20 to 30 percent, rising debt service remains the bane of its numerous financial issues and growth.

Nigeria’s problem is that the debt service takes a big part of the government revenue,” he said.

He said, “Crisis like this is often what it takes to bring a nation together to have that consensus within the political, business, government, military, civil society to say, ‘We have to do something that departs from business as usual.’

“And for Nigeria, this is a critical juncture. With the contraction in GDP that could happen this year, Nigeria’s per capita income could be around what it was in 1980 – four decades ago.”

Nigeria’s per capita income stood at $847.40 in 1980, according to data from the World Bank. It rose to $3,222.69 in 2014 before falling to $2,229.9 in 2019.

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