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Raw Materials’ Imports Gulp N19.5tn in Seven Years

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  • Raw Materials’ Imports Gulp N19.5tn in Seven Years

Although Nigeria and many of the African countries are admired for being commodity markets, a study of importation in the country shows that Nigeria has spent as much as N19.5tn on the importation of primary raw materials into the country in the past seven years.

Statistics obtained from the Raw Materials Research and Development Council showed that between 2010 and 2015, Nigeria spent N13.6tn on the importation of raw materials that could be replaced with other materials from local sources if some more rigorous work could be put into the country’s import substitution strategy.

By 2016, the country spent another N5.89tn on the importation of similar raw materials; thus, bringing the total sum spent on the importation of primary raw materials into the country within the seven-year period to N19.5tn. The imports in 2016 included some finished products.

This means that, on the average, the country splashed N2.79tn every year in the past seven years.

In broad categorisation, according to the RMRDC, the importation of cereals into the country constituted the highest source of capital flight in the importation of primary raw materials into the country.

For the first six years (2010 to 2015), cereals worth N2.49tn were imported into the country. This was followed by the importation of plastics, which gulped N1.88tn. Articles of iron and steel used as raw materials consumed N1.59tn.

Other categories of raw materials imports that hit the N1tn mark within the first six-year period were fish and crustacean, mollusc and other aquatic invertebrate, which gulped N1.28tn and rubber, which consumed N1.04tn.

Iron and steel raw materials consumed N949.38bn; sugar and sugar confectionery gulped N897.23bn; dairy consumed N692.37bn; while paper gulped N664.91bn.

Organic chemicals gulped N637.79bn; aluminium and articles of aluminium gulped N470.76bn; pharmaceutical products consumed N371.38bn; inorganic chemicals, N305.73bn; fertilisers, N237.13bn; and tomatoes, N102.69bn.

In 2016 alone, the importation of mineral fuels, oils, waxes and bituminous sub gulped N1.12tn; the importation of cereals gulped a total of N301.08bn; while the importation of fish and crustaceans gulped N206.43bn.

Other imports that consumed considerable amount of money were given as paper, paperboard and articles of paper wood, N129.74bn; miscellaneous chemical products, N124.08bn; plastics, rubber and articles of plastic, N236.47bn; dairy, eggs, and honey, N134.31bn; and animal or vegetable fats, oil and waxes, N62.54bn.

The Director-General, Raw Materials Research and Development Council, Dr. Hussaini Ibrahim, said the high level of imports of raw materials was not good for the economy, adding that government’s intervention was necessary to ensure domestic production of raw materials, which would reflect on declining levels of imports over time.

He said, “Efforts and resources could be properly channelled towards domestic production of the imported items by harnessing domestic potential for successful adoption of appropriate standards, conformity assessment and metrology parameters within the confines of business and societal concerns.

“Given dwindling oil revenue needed for national development, Nigeria’s ambition is to look inwards and commence domestic production of essential raw materials and products, especially in the areas where we have potential to source within the country.”

Similarly, the Minister of Science and Technology, Dr. Ogbonnaya Onu, said any economy not diversified and heavily dependent on the import of raw materials would find it difficult to confront the challenges of the growing shifts in global production and trade patterns.

According to the minister, Nigeria needs to begin to produce what it needs not only in the area of raw materials but also to fully prepare for a post-oil economy.

He said, “To enable us to achieve this, Nigeria should put in place measures that will enable her to emerge as a nation that can produce what she needs and export the surplus to other parts of the world.

“This will strengthen our foreign reserves and boost foreign trade with its multiplier benefits to our national economy. This is the only reasonable way to go. Indeed, we do not even have a choice if we must be the great nation, which we deserve.”

Onu added, “We have put together a novel National Strategy for Promoting Competitiveness in Raw Materials and Products Development in Nigeria. It is intended to confront and defeat the challenges posed by growing shifts in global production and trade patterns. This will help Nigeria conserve her scarce foreign exchange and stimulate global competitiveness that is derived from a resilient domestic capacity in a diversified economy for the good of all.”

The minister said it was in order to achieve this that the government had approved new guidelines for project and contract execution in science, design, engineering and technology in order to infuse local technology.

According to him, the guidelines are designed to drastically reduce capital flight, promote local capacity, strengthen local manpower development, encourage indigenous technology capacity, enhance national self-reliance and restore national pride.

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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Computer Village Traders Demand Refunds as Lagos State Cancels Katangowa Project

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Traders at the renowned Computer Village in Lagos find themselves in a state of uncertainty following the abrupt termination of the multibillion-naira Katangowa project by the Lagos State Government.

The project, which was aimed at relocating the bustling tech market from its current site in Ikeja to the Agbado/Oke-Odo area of the state, has left traders in a state of limbo.

Despite the cancellation of the project reportedly occurring two years ago, traders claim they were not informed by either the government or the developers, Bridgeways Limited.

This lack of communication has left them in a precarious position, particularly concerning the substantial upfront payments made by some traders to the developers.

Chairman of the Computer Village Market Board, Chief Adebowale Soyebo, expressed dismay at the lack of communication from the authorities regarding the project’s termination.

He explained that neither the government nor the contractors had officially informed them of the decision, leaving traders in the dark about the fate of their investments.

Traders who had made payments to Bridgeways Limited now seek clarity on the refund process. The absence of official communication has compounded their concerns, with many uncertain about the fate of their investments.

While acknowledging the payments made by traders, Lagos State Governor’s Adviser on e-GIS and Urban Development, Dr. Olajide Babatunde, assured that the government would facilitate refunds.

He, however, said there is a need for proper identification and verification to ensure that affected traders receive their refunds accordingly.

The termination of the Katangowa project has reignited debates about the relocation of Computer Village.

Traders assert that the issue of relocation should not be raised until the new site is at least 70% completed, as per their agreement with the government.

The cancellation of the Katangowa project underscores the challenges associated with large-scale urban development projects and the importance of transparent communication between stakeholders to avoid such situations in the future.

As traders await further directives from the government, they remain hopeful for a resolution that safeguards their interests and ensures the continuity of one of Nigeria’s most prominent tech markets.

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Government Begins Disbursement of N200bn Support Fund to Manufacturers and Businesses

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The Ministry of Industry, Trade and Investment has initiated the disbursement of the long-awaited N200 billion Presidential Conditional Grant Scheme.

This is the beginning of a vital phase in the government’s strategy to provide financial assistance to manufacturers and businesses across Nigeria.

The scheme, which is being administered through the Bank of Industry (BOI), has been divided into three categories of funding, totaling N200 billion.

The disbursement process comes after an exhaustive selection process and verification of applicants to ensure transparency and accountability in the allocation of funds.

Doris Aniete, spokesperson for the Ministry of Industry, Trade and Investment, announced the progress in a statement posted on the trade minister’s official X (formerly Twitter) handle.

Aniete highlighted that verified beneficiaries have already started receiving their grants, signaling the beginning of the phased disbursement strategy.

“We are pleased to inform you that the disbursement process for the Presidential Conditional Grant Programme has officially commenced. Some beneficiaries have already received their grants, marking the beginning of our phased disbursement strategy,” stated Aniete.

She further disclosed that by Friday, April 19, a substantial number of verified applicants are set to receive significant disbursements.

However, Aniete emphasized that disbursements are ongoing, and not all applicants will receive their grants immediately, assuring that all verified applicants will eventually receive their grants in subsequent phases.

The initiation of the disbursement process comes after more than eight months since President Bola Tinubu announced the grant for manufacturers and small businesses.

The scheme aims to mitigate the adverse effects of recent economic reforms and foster sustainable economic growth by empowering businesses with financial support.

President Tinubu had outlined the government’s commitment to strengthening the manufacturing sector and creating job opportunities through the disbursement of N200 billion over a specified period.

The funding is intended to provide credit to 75 enterprises, each able to access up to N1 billion at a low-interest rate of 9% per annum.

However, the implementation of the programme has faced challenges, including delays and criticisms regarding the registration process.

Femi Egbesola, President of the Association of Small Business Owners, expressed concerns over the slow pace of data collation and suggested that genuine businesses were being discouraged from accessing the loans.

Despite the hurdles, the commencement of the disbursement process signifies a significant step forward in the government’s efforts to provide vital support to manufacturers and businesses, potentially revitalizing economic activities and driving growth across various sectors.

As beneficiaries begin to receive their grants, the impact of this initiative on the nation’s economic landscape is eagerly anticipated.

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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

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Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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