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Economy

High Expectations Remain as Crop Production Rises

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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.

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

Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020

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Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.

In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.

Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.

This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).

Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.

Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.

The energy company made another payment of US$17.935 million in fee for 2020.

While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.

Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.

Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.

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Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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