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Rising Unemployment in Nigeria Gives Me Sleepless Nights, Says Dangote

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Dangote Cement - Investors King
  • Rising Unemployment in Nigeria Gives Me Sleepless Nights

President of the Dangote Group, Alhaji Aliko Dangote, has revealed that the success or failure of any of his businesses does not bother him or make him lose sleep like the rate of unemployed Nigerian youths.

Dangote, the richest man in Africa, disclosed this at the weekend on the sideline of a meeting with business leaders/chief executive officers from Nigeria and Kenya held at the Dangote Lekki free-trade zone in Lagos.

He stated that unemployment gives him sleepless nights, as he posited that it’s the collective responsibility of both the government and entrepreneurs to create jobs for the teeming Nigerian youths as a way of solving the restiveness and agitations that the nation is experiencing from different geo-political zones.

According to him, population growth is not abating as population and poverty go together especially in the northern part of the country where limitless procreation is recorded.

Dangote also harped on diversification as the major solution to the unemployment challenges the nation is facing, submitting sadly though, that successive governments had always paid lip service to job creation and diversification.

He said: “Since 1978, when I came to Lagos, government has been talking about diversification of the economy which has not happened up till now. It is also sad that nobody is challenging anybody about how many jobs he or she has created.

“In reality though, it is not solely government duty to provide jobs. It is also the duty of entrepreneurs, but government at all levels must provide the enabling environment. When there is no jobs, people get frustrated, and I can tell you that the Boko Haram insurgency is a product of frustration. The way to go is diversification. Nigeria should diversify its economy, and take crude oil as icing on the cake.”

Dangote appealed to young entrepreneurs especially from the Lagos Business School (LBS) who were part of his audience to brace up for the challenge and do something differently. He described Nigeria as a scratched card that has not been touched, and would be useless after loading it. “Nigeria is like a recharge card. Anywhere you touch is money. You should also have visions and be focused,” he added.

On the quit notice order given to Igbo people in the North by a coalition of northern youths, Dangote said it is a topic not worth discussing, and however, urged the people to stop talking about it. According to him, “Unknown people are talking about Igbo leaving the North, and we are joining them to talk about it. Why are we talking about it? It shouldn’t be discussed at all. Those saying it are just seeking relevance.”

He recounted many world class projects his conglomerates have embarked, including the largest single petroleum refinery in the world with 650,000 barrels per day capacity, and 780 KTPA polypropylene, Africa’s largest urea plant with 3 million tonnes per annum capacity; largest sub-sea pipeline infrastructure in any country in the world with 1,100 kilometres to handle three billion sef of gas per day; world scale gas treatment stations and world class petrochemical complex among others.

Dangote added that his company is determined to transform and diversify the Nigerian economy.

“When we rolled these projects out, there was nothing like devaluation but now, we have to double our efforts and it is not a problem because Dangote group is a leader in the new breed of African multi-national conglomerates, and that is why its rated top 10 in Africa and top 400 globally.

“We are globally competitive, yet growing local capacity and manufacturing quality products. Dangote is rapidly transforming from a Nigerian company to a dominant African brand,” the Dangote Group president noted.

The business mogul told the gathering that while people are scared of investing especially in the recession the nation has found itself, Dangote group has been investing because without investment, there cannot be growth.

He acknowledged the fact that some individuals had invested in the past but failed with their businesses owing to inconsistencies in government policies and power challenge.

To mitigate these hurdles, Dangote said it became necessary to be closer to those in government in order to always exchange ideas on how to improve the economy. On the issue of power, Dangote stated that his company decided to generate its own power in different countries where it operates; it’s only in South Africa and Ethiopia where it does not have its own power plants because it relies on power from the national grid.

In Senegal we, generate our own power and it’s now in excess, so we sell to the government at modest rate.

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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African Economy Set for Steady Growth: 4% Projected for 2025

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Experts are forecasting a robust growth trajectory of 4% for the continent in 2025.

This optimistic projection was highlighted during the ongoing Afreximbank annual meetings, incorporating the Africaribbean Trade and Investment Forum, held recently in Nassau, The Bahamas.

Yemi Kale, Group Chief Economist and Managing Director of Research and International Cooperation at Afreximbank, presented the 2024 African Trade Report and Economic Outlook, saying the African Continental Free Trade Area (AfCFTA) is significant in driving economic integration and growth.

The projected growth rate of 4% for 2025 reflects a steady recovery path for Africa, building on the expected 3.5% growth anticipated for 2024.

This positive outlook comes at a crucial time when African economies are navigating challenges posed by global economic dynamics, including inflationary pressures and supply chain disruptions.

Kale underscored the resilience of intra-African trade, which expanded by 3.2% in 2023 despite a 6.3% overall contraction in Africa’s trade volumes.

This resilience is a testament to the AfCFTA’s potential to bolster regional trade ties and reduce dependency on external markets.

The Afreximbank report also delved into macroeconomic environments, trade patterns, and sovereign debt sustainability dynamics, providing policymakers and business leaders with actionable insights to navigate complexities in global markets effectively.

Nomusa Dube-Ncube, Premier of Kwazulu-Natal, highlighted Africa’s modest share of global GDP and manufacturing output, emphasizing the untapped potential within intra-African trade.

She noted that while Africa currently accounts for only 3% of world trade, intra-regional trade is steadily increasing, indicating a growing economic ecosystem within the continent.

Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC), echoed the sentiment, advocating for enhanced trade between Africa and the Caribbean.

The ITC projects trade in goods and services between these regions to reach $1 billion by 2028, underscoring the mutually beneficial opportunities for economic expansion.

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Nigeria Sees 95% Surge in Food Imports Despite Emergency on Food Production

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Zambian economy

Nigeria’s food import bill has surged to a five-year high in the first quarter of 2024, despite the federal government declaring a state of emergency on food production.

Data from the National Bureau of Statistics (NBS) reveals a 95.28 percent increase in food imports to N920.54 billion from January to March, compared to N471.39 billion in the same period last year.

This alarming rise comes amid soaring food inflation, which hit a record 40.5 percent in April, reflecting a 15.92 percent year-on-year increase.

The sharp inflation has left many Nigerians struggling to afford a balanced diet, exacerbating the food security crisis in Africa’s most populous nation.

In March, President Bola Ahmed Tinubu emphasized the government’s commitment to self-sufficiency in food production, stating that Nigeria would not rely on imports to stabilize prices.

“We will not allow the importation of food but rather turn the lack in the country into abundance,” Tinubu declared. However, the latest import figures suggest that this goal remains elusive.

The NBS Foreign Trade Statistics report highlights that the value of food imports via maritime, air, and land routes surged 29.4 percent from N711.4 billion in the fourth quarter of 2023.

Major agricultural goods imported included durum wheat from Canada and Lithuania, valued at N130.26 billion and N98.63 billion, respectively. Frozen blue whitings from the Netherlands accounted for N16.67 billion.

Wheat imports alone constituted N519.75 billion of the total food import bill. The average cost of wheat imports, a significant driver of the food import value, increased by 33 percent compared to the previous quarter’s value of N391.01 billion.

The rising importation of wheat reflects its popularity among Nigerian consumers amid skyrocketing prices of close substitutes like garri and rice.

Overall, Nigeria’s total imports for Q1 2024 amounted to N12.64 trillion, representing a 39.65 percent increase from N9.05 trillion in Q4 2023 and a 95.53 percent rise from N6.47 trillion in Q1 2023. Food imports accounted for 7.3 percent of total imports during the period under review.

The bulk of Nigeria’s imports came from Asia, China, Europe, America, and Africa. Mineral fuels topped the import category with N4.44 trillion, representing 35.09 percent of total imports.

Machinery and transport equipment followed with N3.17 trillion, contributing 25.08 percent, and chemicals and related products at N1.79 trillion, making up 14.13 percent of total imports.

Despite the federal government’s initiatives to boost local food production and reduce dependency on imports, the latest data underscores the persistent challenges facing Nigeria’s agricultural sector.

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Ethiopia Boosts Spending by 21%, Eyes IMF Program for Economic Relief

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Ethiopia has announced a 21% increase in its 2025 budget, marking the first budget since defaulting on a Eurobond payment and committing to economic reform discussions with the International Monetary Fund (IMF).

The nation’s Finance Minister, Ahmed Shide, revealed the new budget details to lawmakers on Tuesday, outlining plans to spend 971.2 billion birr ($16.9 billion) in the fiscal year starting July 2024.

The increased budget reflects Ethiopia’s commitment to addressing its economic challenges head-on. Despite the heightened expenditure, the fiscal deficit is projected to remain stable at 2.1% of gross domestic product (GDP), unchanged from the current fiscal year.

Financing the Deficit

Minister Shide outlined a plan to cover the 358.5 billion-birr deficit through a combination of local and foreign borrowing.

The domestic borrowing component will be managed via government treasury bills and medium-term bonds. Shide emphasized that until substantial external donor support is secured, Ethiopia will continue to rely heavily on its domestic markets to finance budget deficits.

“While the government has secured some external financing from the World Bank and the European Union, negotiating an IMF program will be crucial to alleviate pressure on local banks and secure overall debt relief,” said Giulia Filocca, a senior analyst at Standard & Poor’s for sovereign and international public finance ratings.

IMF Program and Economic Reforms

An agreement with the IMF is seen as a pivotal step for Ethiopia. The nation failed to remit a $33 million coupon payment for its $1 billion bond in December 2023, leading to agreements with some creditors, including the Paris Club, to suspend debt repayments.

In exchange, Ethiopia is expected to reach a staff-level agreement with the IMF, which will likely include economic reforms such as devaluing the birr currency.

“Our expectation is that an IMF program will be signed this year, but the timeline remains unclear due to ongoing political developments and challenges over foreign-exchange reforms,” added Filocca.

Budget Highlights

The new budget includes 451.3 billion birr for recurrent spending, 283.2 billion birr for capital expenditure, and 236.7 billion birr allocated for regional subsidies.

The government projects income of 612.7 billion birr, with tax revenue expected to contribute 502 billion birr and non-tax income 61.6 billion birr. Sector budget support is anticipated to bring in 7.3 billion birr, with aid and grants expected to add 41.8 billion birr.

Economic Outlook

Ethiopia’s economy is forecasted to expand by 8.4% in the coming fiscal year, up from an expected 7.9% growth rate in the current period. The budget increase is designed to support this growth trajectory by enhancing public investment and stimulating economic activity.

“Our partnership with the IMF and other international financial institutions will be key to ensuring Ethiopia’s economic resilience and sustainable growth,” Minister Shide concluded. “We are committed to implementing the necessary reforms to secure a brighter economic future for our country.”

As Ethiopia navigates its economic challenges, the government’s proactive approach to increasing spending and engaging with the IMF reflects a strategic effort to restore fiscal stability and drive long-term economic development.

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