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High Expectations Remain as Crop Production Rises



Corn, Soybeans Decline As Favorable Weather May Boost U
  • High Expectations Remain as Cash Crop Production Rises

While the nation has seen an increase in the production of cash crops, stakeholders have highlighted the need for the Federal Government to intensify effort to boost local food production, ANNA OKON writes.

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, recently inaugurated the exportation of 72 tonnes of yam to the United States and the United Kingdom.

That was the first time Nigerian yams would be exported to Europe under the brand, ‘Nigeria’.

Before now, according to the Director-General, Standards Organisation of Nigeria, Osita Aboloma, Nigerian yams exported to Europe carried the stamp of Ghana, Cameroon or some other West African countries.

The reason for this, Aboloma explained, was poor packaging, a challenge Ogbeh has succeeded in taking care of.

Following the steep fall in global oil prices, there were increasing calls for the diversification of the Nigerian economy.

To diversify the economy, the Federal Government turned to agriculture, a sector that suffered decades of neglect due to the over-reliance on crude oil wealth.

The minister started a programme tagged, ‘Agricultural Sector Roadmap (the Green Alternative), Agricultural Promotion Policy (2016 – 2020)’.

He explained that the APP would seek to resolve inability of the country to meet local food demand and inability to export at quality levels required for market success.

The government consolidated efforts in the rice sector, which had been the anchor project of the immediate past minister.

As part of an aggressive programme to solve the rice supply deficit, the Central Bank of Nigeria deployed its Anchor Borrowers’ Scheme, an initiative that made funds available to farmers in Kebbi and other major rice producing states.

The pilot phase of the project, according to an Executive Director at the Bank of Industry, Jonathan Tobin, benefitted over 75,000 farmers and later produced over two million metric tonnes of rice.

In March 2016, the president launched dry season rice farming in Kebbi. With this initiative, the crop could now be grown round the year instead of being grown only during the rainy season.

The result was that by May 2017, the state had led the production of milled rice by 3.56 million metric tonnes, and according to a report released by Growth and Employment in States (GEMS4), a programme funded by the United Kingdom Department for International Development, Nigeria had netted 5.7 million tonnes of milled rice bringing its rice production closer to the 7 million tonnes needed to meet local demand.

Inspired by the need to conserve scarce foreign exchange, the success of the project and desirous of encouraging more investment in the sector, the government had earlier banned rice from coming in through the land borders in March 2016.

The government stuck to its guns on the ban despite opposition from several quarters.

The success of the project also opened up collaboration between the Lagos State and Kebbi, where rice was fed to the over 2.5 million metric tonnes capacity of rice mills established by the Lagos State Government.

The collaboration resulted in the production of LAKE Rice which was sold for N12, 000 per 50 kg bag to customers in December 2016 at a time when the same quantity sold for between N18, 000 and N20, 000.

The government then set plans in motion to duplicate the success in other agro produce.

Earlier in 2015, the Nigerian Export Promotion Council had identified 13 National Strategic Export Products that would replace oil as foreign exchange earner.

The Executive Director and Chief Executive Officer of NEPC, Mr. Segun Awolowo, listed five key cash crops – palm oil, cocoa, sugar, rice and cashew – as the agro produce under the NSEPs.

He noted that the crops would be grown through the One State One Product programme where each state is encouraged to produce in large quantity, a crop in which it has comparative advantage.

The government also embarked on several other initiatives including the fertiliser initiative where fertilisers and seeds were sold to farmers directly at subsidised price.

The nation’s agro export increased by 82 per cent in the first quarter of 2017 from four per cent in the last quarter of 2016.

Sesame seeds, soya beans, shrimps/prawns, cashew nuts and palm kernel became the largest agro produce exports in Q1 2017, netting combined revenue of N25.09bn, according to data obtained from the National Bureau of Statistics.

Sesame seed topped the earnings list with N13.03bn, followed by soya beans, which earned revenue of N4.97bn; frozen shrimps and prawns, N3.39bn, cashew nuts in shell, N2.44bn, and crude palm kernel, N1.26bn.

Analysts have criticised the export of yam, as the price has increased from N150 per medium tuber in 2014 to about N600.

A professor of Economics at the University of Uyo, Leo Ukpong, said the government needed to deploy research to boost local food production so that there would be enough for the local population and the surplus could be sent to the export market.

The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, stressed the need to invest in boosting local production before feeding the export market.

He said, “There is a need to get our priorities right. The major preoccupation of the agriculture ministry at this time should be how to improve productivity in agriculture. The sector is still dominated by small-holder farmers that do not have the capacity to support the realisation of the vision of food security for the country.

“The sector is grappling with serious issues of high cost of farm inputs including agrochemicals, high cost of agricultural machineries and equipment, access to land for mechanised farming, sustainable off-takers of agricultural products, access to finance (especially working capital by investors in the sector), security challenges faced by farmers because of the activities of herdsmen and many more. These are the issues I expect the agriculture ministry to be addressing now.”

A pharmacist, Mr. Michael Okafor, noted that the government could have turned the yam into Pharmaceutical Grade Starch and sold it to the pharmaceutical sector, which was currently importing the input.

He stated that instead of the N18m that the government could make from the 72 tonnes of yam, it could have made N84m profit from the sale of PGS locally.

He said, “If 72 tonnes of yam is processed to PGS, (that is the major component of tablets and capsules), we will get about 9.7 tonnes of pure PGS. PGS goes for anywhere from $20 – 40/kg in the international market.

“Ogbeh’s 72 tonnes of yam which will be sold at the international market for N18m is, therefore, worth a princely N102m if it was processed to PGS (assuming it is sold for $30/kg, just to be conservative). So, N18m worth of yam, processed to N102m, would have generated a profit of about 84m.”

The rush to export and earn dollars by farmers had also deprived the local poultry industry of feed.

The President, Poultry Association of Nigeria, Dr. Ayoola Oduntan, told our correspondent that farmers were more interested in selling corn and soya beans outside Nigeria to earn dollars.

He said that the situation had created scarcity, which had made the price of soya beans and maize to go up and become unreachable to poultry farmers, resulting in the increase in prices of chickens and eggs.

Eggs witnessed an increase in price from N15 to N50 between 2015 and 2017.

The government expects more investors to take interest in the agro sector while the investors are seeking an enabling environment for this to happen.

The government has been encouraging non-oil exporters by relaxing the rule on utilisation of export proceeds.

“The exchange rate is now better for exporters than before. The banks are no longer exchanging our dollars strictly at the official rate. So, there is a lot of encouragement to invest and declare exports,” the National President, Federation of Agricultural Commodities Association of Nigeria, Dr. Victor Iyama, said.

The National President, Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture, Chief Alaba Lawson, advised the government to make lands and machinery and improved seedlings available, adding that the private sector was all set to invest heavily in the sector.

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

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Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets



IMF global - Investors King

The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs



Food Inflation - Investors King

Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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Inflation to Climb Again in June, but at a Reduced Pace, Predicts Meristem



Nigeria's Inflation Rate - Investors King

As Nigeria awaits the release of the National Bureau of Statistics’ report on June 2024 inflation, economic analysts project that while inflation will continue its upward trajectory, the pace of increase will moderate.

This comes after inflation rose to a 28-year high of 33.95% in May, up from 33.69% in April.

Meristem, a leading financial services company, has forecasted that June’s headline inflation will rise to 34.01%, a slight increase from May’s figure.

The firm attributes this persistent inflationary pressure to ongoing structural challenges in agriculture, high transportation costs, and the continuous depreciation of the naira.

Experts have highlighted several factors contributing to the inflationary trend. Insecurity in food-producing regions and high transportation costs have disrupted supply chains, while the depreciation of the naira has increased importation costs.

In May, food inflation grew at a slower pace, reaching 40.66%, but challenges in the agricultural sector, such as the infestation of tomato leaves, have led to higher prices for staples like tomatoes and yams.

Meristem predicts that food inflation will persist in June, driven by these lingering challenges. Increased demand during the Eid-el-Kabir celebration and rising importation costs are also expected to keep food prices elevated.

Core inflation, which excludes volatile items like food and energy, was at 27.04% in May. Meristem projects it to rise to 27.30% in June.

The firm notes that higher transportation costs and the depreciation of the naira will continue to push core inflation up.

However, they also anticipate a month-on-month moderation in the core index due to a relatively stable naira exchange rate during June, compared to a more significant depreciation in May.

Cowry Assets Management Limited has projected an even higher headline inflation figure of 34.25% for June, citing similar concerns.

The firm notes that over the past year, food prices in Nigeria have soared due to supply chain disruptions, currency depreciation, and climate change impacts on agriculture.

This has made basic staples increasingly unaffordable for many Nigerians, stretching household budgets.

As inflation continues to rise, analysts believe the Central Bank of Nigeria (CBN) will likely hike the benchmark lending rate again.

The CBN’s Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR) by 650 basis points this year, bringing it to 26.25% as of May 2024.

At a recent BusinessDay CEO Forum, CBN Governor Dr. Olayemi Cardoso emphasized the MPC’s commitment to tackling inflation, stating that while the country needs growth, controlling inflation is paramount.

“The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilize the naira. Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” Cardoso said.

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