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Stakeholders Lament Neglect of Cocoa Industry

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  • Stakeholders Lament Neglect of Cocoa Industry

Worried by the myriads of problems facing their operations, indigenous cocoa manufacturers has urged the Federal Government to reduce the cost of borrowing in Nigeria, and embark on massive rural infrastructure development to enhance productivity in the country.

Indeed, the stakeholders who spoke in an interview argued that the cocoa industry in Nigeria has remained the most neglected sector of the economy, despite its position as one of the most viable agro-allied industries in the world.

Production of sustainable cocoa significantly impacts the economies of many developing countries and provides livelihood for an estimated 40 to 50 million people globally.

The product, if well managed could be a support to the manufacturing sector by providing the raw material needs of the industrial sector, as well as providing employment to the people, especially in the rural areas.

Among the factors identified, as setbacks to the sector are high cost of borrowing, deregulated environment, inconsistent government policy and slow implementation of policies.

Citing the recent export stimulation facility initiative introduced by the government to drive exports in Nigeria, the stakeholders, who are currently besieged with intense hardship, lamented that no exporter has been able to access the funds for almost one year of its pronouncement.

Specifically, the Chief Executive Officer of FTN Cocoa Processors Plc, Akin Laoye, explained that the deregulated environment is impeding the growth of the processing sector, adding that cocoa sector needs some degree of regulation.

He said: “One of the major challenges the industry is facing is inconsistent government policy. Typical example is the one step forward and three steps backwards policy on the export expansion grant.

“ It jeopardises planning and growth. Whatever be the problems of implementation is within the powers of the government to control. It is unhealthy to throw the baby and the birth water away.

“ To deepen Nigeria’s industrial base, it is counter productive to allow agricultural raw materials to be exported without adding value. Value addition will grow the industrial sector, generate employment, and enhance value of the revenue from export.

He added, “Another challenge is high cost of borrowing in Nigeria and non- accessibility to funds. The industry will do well if operators can easily access single digit credit rates.

He urged government to stop dithering on policies and do everything within its powers to find a lasting solution to tackle the ongoing recession for a brighter 2017.

Another industrialist, Chief Olusegun Osunkeye, noted that giving the strategic importance of cocoa, it is imperative that the national precarious over difference on cocoa importation should have been checked.

According to him, Nigeria has the potential of becoming a net exporter of cocoa if the capacity of the existing plantation and factories are enhanced, new ones established, and cocoa farmers encouraged and supported through the provision of credit facilities.

“The cocoa industry is one of the biggest industry in terms of its socio-economic impact in the country. Cocoa industry employs more people than the crude oil industry, but unfortunately, the industry have been treated very badly over the years.

“Government must pay particular attention in ensuring the survival of this industry because its survival is the survival of many families who have been impoverished and poor.”

Osunkeye, who was the former Chairman of Nestle Food Plc, also pointed out that Nigeria has the capacity to produce enough cocoa to meet local demand and even export massively to other countries.

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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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

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Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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Geregu Power Plc Announces N14.46bn Profit in Q1 2024

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Geregu Power Plc

Geregu Power Plc has announced a profit of N14.46 billion for the first quarter (Q1) of 2024.

This represents a 307% increase when compared to the same period last year.

The power-generating company, known for its pivotal role in Nigeria’s energy sector, disclosed its outstanding financial results in its interim financial statement filed with the Nigerian Exchange Limited on Tuesday.

This disclosure comes shortly after the firm’s Deputy Chief Executive, Julius Omodayo-Owotuga, hinted at the promising financial outlook during the company’s recent annual general meeting held in Lagos.

According to the interim report, Geregu Power Plc’s revenue surged to N50.42 billion in the first quarter of 2024, representing an increase of 254.37% year-on-year appreciation.

The company’s net finance income transitioned from a negative position to N133.61 million. This positive momentum was supported by a moderation in finance costs, which decreased from N3.141 billion to N2.29 billion as of March 2024.

Speaking to stakeholders at the recent annual general meeting, Femi Otedola, Chairman of Geregu Power, expressed satisfaction with the company’s exceptional financial performance in 2023.

Otedola highlighted the board’s decision to propose a dividend distribution of N8 per share for the 2023 financial year as a testament to their commitment to rewarding shareholders and confidence in the company’s future prospects.

The robust financial results for the first quarter of 2024 further solidify Geregu Power’s position as a leading player in Nigeria’s energy landscape.

The company’s commitment to operational excellence, strategic investments, and adherence to international standards, such as obtaining ISO 9001 and 14001 certifications from the Standard Organisation of Nigeria, underscores its dedication to driving sustainable growth and value creation.

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Guaranty Trust Holding Company Plc Records N609.3bn Profit Before Tax in 2023

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GTCO Commemorates Listing on Nigerian Exchange - Investors King

Guaranty Trust Holding Company Plc (GTCO) has announced a strong profit before tax (PBT) of N609.3 billion for the 2023 financial year.

This represents an increase of 184.5 percent when compared to the previous year.

The audited consolidated and separate financial statements filed with the Nigerian Exchange Group and London Stock Exchange on Monday revealed market capitalization exceeded N1 trillion on the NGX to further solidify GTCO’s position as one of the top financial holding companies in Nigeria.

During the period under review, the group’s post-tax profit rose by 218.99 percent to N539.65 billion from N169.17 billion in 2022.

Key indicators such as loans and advances increased by 31.5 percent to N2.48 trillion, while deposits grew by 63.7 percent to N7.55 trillion.

The group’s total assets and shareholders’ funds closed at N9.7 trillion and N1.5 trillion, respectively.

Despite the challenging economic environment, GTCO maintained a strong capital adequacy ratio of 21.9 percent.

Also, the group sustained asset quality, with IFRS 9 Stage 3 loans improving to 4.2 percent in December 2023 from 5.2 percent in the same period of the prior year.

However, the cost of risk experienced an uptick, rising to 4.5 percent from 0.6 percent in December 2022, largely due to worsening macroeconomic factors.

Despite these challenges, GTCO’s pre-tax return on equity stood at 50.6 percent, while pre-tax return on assets was 7.6 percent. The cost-to-income ratio remained favorable at 29.1 percent.

Commenting on the financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of GTCO, expressed satisfaction with the company’s performance amidst a challenging operating environment.

He attributed the strong performance to the successful implementation of the group’s business model across banking and non-banking business verticals.

“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld,” he stated.

“In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.

In line with its commitment to shareholders, GTCO announced a final dividend of N2.70k, bringing the total dividend for 2023 to N3.20k.

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