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Nigeria Must Export to Survive

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Institute of Chartered Shipbrokers
  • Nigeria Must Export to Survive

The president of Federation of Agriculture Commodities of Nigeria (FACAN), Victor Iyama, in this interview with Bukola Aroloye talk about the plight of farmers, his view on recapitalisation of Bank of Agriculture and what government should do in the sector.

What is your view about the recapitalisation of Bank of Agriculture; how effective has it been?

They are still in the process and by the time they finish the reconstruction of the board and the recapitalisation it will surely benefit the stakeholders. They just constituted an interim board and we can’t start assessing them.

How are the farmers been able to access money?

Farmers generally still have problems with access to fund and you know that all the intervention which would bring the interest quickly is not easy to access except of those who are sometimes lucky to be involved in contract farming. Before then, they were providing collaterals and all that to the principal. The issue of access to funding is still a problem. How many people can do anything meaningful without fund, even with prohibitive high interest regime? As far as I am concerned, I strongly believe until CBN starts changing policy in this country where the MRRA take over around 14.5% and where the central bank is selling treasury bill at about 18.5% to twenty percent, how can people have access to fund to do anything meaningful? Because if I were bank myself why should I give out money even at 28%, take all the risk when I can easily jump into CBN in the name of treasury bill and be earning 18.5% to 20%? We are not encouraging anything in this country. They are quick to compare with China and Japan. In all these places, what is MRRA in Japan? What is MRRA in China? Look at all those countries and yet they will be talking of farming, small scale industry, even industrialisation. Take Nigeria back to the early 70s when we really had industrial growth, when we had Bata, Lennnard, and Dunlop when most of these were agric -based industry. Where are they today? But then MRRA in Nigeria is about 2% to 2.5% and lending rate about 7.5%, so take Nigeria back to those days and what it is now. No infrastructure.

What are the things your federation is doing to make government and farmers get the policy of exporting foods outside, especially yams? Isn’t government going to be the sole beneficiary of the gains?

Well, export generally is of benefit to everybody both individual and government. Even the countries we are on the same level are doing far better in export than us which would not have been so if they had followed what we have been preaching for years. But today, we are talking of oil. I remember in 2004, 2005, I made a representation telling them that it was time to develop the non oil sector especially agriculture, especially when we had excess crude money that they were flushing away. We suggested to them that they should put it back into agriculture. If they had done that, by now we would have become the next exporter of rice, fruits and vegetables.

People have been shouting about yam and we are still the largest producer of yams in the world, but we could have multiplied our production by now. We must export to survive, because if we give oil five years or 10years it would be consequential. Land would never finish, especially our fertile land in Nigeria, as far as I am concerned, some people are saying how can we be exporting yam? More people will come into the business. As long as we have good infrastructure and all that to back it up. People keep talking, youths are not ready. Youths are now ready for farming because they now know there are no jobs. We have been preaching to them youth are ready, but they cannot do things like cocoa for now because it takes long time to grow, but crops like sweet potatoes, rice, beans, sorghum, cassava, vegetables, all these can also be taught in school. I am happy with what is happening in oil and gas now because our government is begin to think and diversify and we need to go back to our real goldmine which.

What more can the government do to get other stakeholders to make Agriculture the cornerstone of our economy?

The government needs to involve the stakeholders in the bank which is a welcome decision and we are waiting for it. We know that before the end of their first tenure, they will ensure everything will be done. I am looking at between now, January, February, we would have seen the bank to have been fully restructured. And that is all we are waiting for because we need a special bank to fund Agriculture. It is the bank the farmers will go to, and know that they can get money for 5%. Because in Japan they can get for 1%, in China they can get for 2% but we are not even looking at that even in some cases in Japan they can even give you at 0%. as long as it is agriculture Government also has to strengthen the insurance scheme in Agriculture too, because we really need it . If the insurance scheme is well strengthened, the farmers will not have to take their great grandfathers’ properties to use for collateral before they can borrow money.

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.

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Company News

BUA Cement Announces 24.6 Percent Increase in Profit to N43.4 Billion in H1 2021

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BUA Cement stock - Investors King

BUA Cement Plc, Nigeria’s second-largest cement manufacturing company, on Thursday reported a 22.7 percent increase in revenue in the six months ended June 30, 2021.

Revenue rose from N101.261 billion recorded in the first half (H1) of 2020 to N124.278 billion in the first half of 2021.

The company disclosed in its unaudited financial statements release through the Nigerian Exchange Limited and seen by Investors King.

As expected, the cost of sales inched higher by 19.1 percent from N55.539 billion in H1 2020 to N66.158 billion in H1 2021. While gross profit expanded by 27.1 percent to N58.120 billion in H1, up from N45.723 billion.

The cement manufacturing company grew other income by 52.3 percent from N47.653 billion filed in H1 2020 to N72.6 billion in H1 2021.

Administrative expenses rose to N4.17 billion in the period under review, representing an increase of 57.9 percent when compared to N2.643 billion recorded in H1 2020.

Operating profit increased by 23.8 percent from N40.809 billion in the corresponding period of 2020 to N50.524 billion in the period under review.

Profit before income taxes rose by 26.9 percent to N49.700 billion in H1 2021 from N39.165 billion in H1 2020.

The company paid N6.3 billion in income tax in the first half of 2021.

Therefore, profit after tax stood at N43.396 billion in the first six months of 2021, an increase of 24.6 percent when compared to N34.819 billion achieved in the same period of 2020.

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Appointments

Seplat Energy Appoints Dr. Emma FitzGerald as an Independent Non-Executive Director

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Seplat Energy Plc - Investors King

Seplat Energy Plc has appointed Dr. Emma FitzGerald as an Independent Non-Executive Director of the Company, the company disclosed on Thursday.

Dr. FitzGerald will replace Lord Mark Malloch-Brown who retired from the Board of the Company on 1st August 2021.

Dr. Emma FitzGerald Profile

Dr. FitzGerald is a seasoned executive in Energy & Water, with hands-on experience in transformation through her many years of working at Shell, ranging from building its lubricants business in China to running its Global Retail network.

From 2007-2010, she was accountable for Shell’s Downstream strategy and played a key role in reshaping Shell’s renewables strategy including the creation of Raizen, a game changing biofuels JV with Cosan. From 2013 to 2018 she ran gas distribution and water & waste networks for National Grid and Severn Trent where she successfully
positioned them as sustainability thought leaders in their Industries.

Most recently Dr. FitzGerald served as CEO of Puma Energy International, a global energy company owned by Trafigura and Sonangol, which is focused on high potential developing markets in Africa, Asia and Central America. In 2020 she set up Puma’s Future Energies division to play a critical role in helping customers and communities find the right energy solutions to support the energy transition. Over the last 10 years she has served on various Boards in executive and non-executive capacities and currently sits on the board of UPM Kymmene, an international paper & biomaterials business focused on innovating for a future beyond fossil fuels.

Commenting on the appointment, Dr. A. B. C. Orjiako, Chairman of SEPLAT Energy said: “The Board of SEPLAT Energy is indeed delighted to have Dr. Emma Fitzgerald on board as she brings vast knowledge in important areas such as the energy sector, renewables and sustainability. SEPLAT Energy has a great future ahead and looks forward to the enormous contribution she will make towards its continuing global success.”

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Company News

Robinhood IPO Priced at Lower End of Range, Firm Valued at $32B

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Robinhood-Investors King

Stock and crypto-trading app Robinhood has secured a $32 billion valuation via its initial public offering (IPO) and is set to debut on the Nasdaq exchange on Thursday.

According to a press release on Wednesday, Robinhood has priced its offering at $38 per Class A common stock share.

The pricing is at the lower end of the $38-$42 per share price range the company had targeted and had planned on selling 5.5 million shares targeting a $1.89 billion raise.

Net proceeds from the sale will go toward working capital, capital expenditures, funding tax obligations, hiring efforts, customer support services, among others.

Shares will be listed on the Nasdaq Global Select Market on Thursday, according to the release.

Earlier this month, Robinhood began unconventionally offering a portion of its IPO to users via its app — a view some consider to be a risky gamble.

Known for its zero-fee trading structure, the company has continued to endure hits to its image as well as legal and political ramifications stemming from the fallout of the GameStop saga and limitations to users trading crypto.

The company is trying to reshape that image and is reportedly working on a new feature that will help protect users from crypto price volatility while hiring a former Google alumn to improve its overall product design.

“Robinhood intends to use the net proceeds for working capital, capital expenditures, funding its anticipated tax obligations related to the settlement of RSUs, and general corporate purposes including increasing its hiring efforts to expand its employee base, expanding its customer support operations and satisfying its general capital needs,” the firm said in the announcement.

Robinhood filed the public offering prospectus on July 1, noting at the time that 17 percent of its total revenue in Q1 came from crypto trading transaction fees, which represented a big jump from the 4 percent in Q4 2020.

“While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34 percent of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4 percent for the three months ended December 31, 2020,” the firm said in the initial filing.

Still, the company’s CEO Vlad Tenev is staring down allegations from the Financial Industry Regulatory Authority over his failure to register Robinhood Financial relating to compliance issues.

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