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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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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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