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Boosting Sugar Cane Farming to Create Jobs

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Agriculture - Investors King
  • Boosting Sugar Cane Farming to Create Jobs

Nigeria is one of the major producers of sugarcane in Africa, with about 500,000 hectares of land which can produce about five million metric tonnes (mt) of sugarcane.

According to the National Sugar Development Council (NSDC), the five million metric tonnes (Mt) of sugarcane will yield about three million mt of sugar if processed.

However, despite the country’s potential in sugar production for local consumption, its reliance on importation has become worrisome as it produces only two per cent of its sugar requirement. Nigeria imports about 1.7 million tonnes of sugar, up from 1.3 million tonnes in 2016.

To address this, there have been various private sector efforts to encourage increase in acreage and cultivation.

It was against this backdrop that the sleepy town of Mokwa in Niger State witnessed the inauguration of the Sunti Golden Sugar Estates Limited, a subsidiary of Flour Mills of Nigeria (FMN ), by President Muhammadu Buhari.

According to Buhari, the N50 billion estate will produce 100,000 tonnes of high quality raw sugar annually to feed Flour Mills Sugar Refinery.

His words: “While we have had some challenges in the implementation of the National Sugar Master Plan (NSMP) in the past, I believe that our vision of attaining self-sufficiency in sugar in Nigeria is well within sight, with the kind of investment that has been made here. I am told that the Estate will engage up to 10,000 people directly once developed, including a network of over 3,000 small-scale outgrowers of sugarcane. This to my mind is central to this administration’s determination to create jobs and gainfully engage our people.”

Niger State Governor Alhaji Abubakar Sani Bello said the decision by Flour Mills to set up a sugarcane plantation in Sunti was the kind of step the state needed to actualise its quest to boost agriculture. The investment, according to him, is also an evidence of the unexploited potential in the sector.

Such ventures, he stressed, are needed and the plantation in particular in Niger State is timely, especially when the overnment is working towards developing a sustainable, diversified and competitive agricultural sector to ensure greater economic stability and growth.

He added that the state was interested in ensuring that more investors established enterprises to create jobs to improve people’s livelihood.

Bello said: “For a long time now, lack of infrastructure has been one of the major hindrances to investment in agriculture. To this end, the government is working to support infrastructure across the state.”

He said while the state appreciated and welcomed investors as partners in development, it expected them to take part by investing in agriculture and helping to grow the economy and eradicate poverty.

“Niger people are proud farmers. For many years, we have cultivated rice, sorghum, millet, cowpeas, corn (maize), palm oil and kernels, kola nuts and sugarcane for local consumption and export. To this end, agriculture has always been a top priority for our state and will always receive our utmost support.

“When we declared 2018 as the year of ‘Agricultural revolution,’ in Niger State, it was a reminder to our people of the immense natural resources that we have been blessed with. And that is why projects such as the Sunti Sugar Estate are a perfect model for investment in our state. From my last visit to Sunti Golden Sugar Estates in 2016 to date, I must say that I am delighted with the level of work and investment that has been put into this project,” Bello said.

Flour Mills Chairman Mr. John Coumantaros said: “The farm at peak production will provide direct employment for about 10,000 people yearly, and impact up to 50,000 people indirectly, including 3,000 small-scale outgrowers, who will be cultivating sugar cane to feed the mill.

“The project illustrates the desire to reduce sugar importation, save billions in foreign exchange, boost local capacity and reduce unemployment by putting thousands of Nigerians to work,” he said.

He thanked the Central Bank of Nigeria (CBN), the Bank of Industry (BoI), the Ministries of Finance, Industry, Trade and Investment and Agriculture for their support for the project, adding that “a project of this nature could never have taken place without the staunch support of Mr President and the Niger State Governor.”

He said N50 billion had been invested in the Sunti Golden Sugar Estate. The company, he said, has significantly invested in food and agro-allied value chains to align with the government’s agricultural initiatives.

Flour Mills, he explained, is determined to ensure the success of agro-allied investments through maximising local content in the company’s final products while it remains committed to its policy of being involved at all stages of the food value chain: from farm to table.

Enclosed within a 35-kilometre dyke, the production facility area is about 17,000 hectares, with a cane area of a maximum output of 10,000 hectares.

The estate features the state-of-the-art irrigation system that will ensure efficient cultivation of sugar cane, with infrastructure, which includes drain pumps, pump stations and power grid.

Drains, culverts and flood-protection walls have also been constructed. The state-of-the art operations bring new technology to the sugar cane farming and milling industry that is poised to increase production yield, create new jobs for Nigerians and teach them new skills. Currently, sugar cane is grown on 3,000 hectares and cultivated under irrigation, making it an annual crop, with 276 hectare (ha) furrow, 700ha pivot and the balance under sprinkler irrigation.

It is harvested by hand and transported by road to the factory using haulage tractors to pull a pair of tandem trailers with a capacity for 30 tonnes of cane.

The estate has brought infrastructure benefits to the surrounding community, with 28 communities taking advantage of the new 30-kilometre road plus expansive road networks, which provide a variety of access routes to indigenes’ homes.

At the farm, smart agriculture is helping the company increase crop yield,optimise workers and machines performance .

Processing will ensure every part of the cane is used.

As a result of the steady demand for skilled workers, which will grow, Niger State will draw labour from other states, and provide training for local workers.

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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Economy

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

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Nigerian Breweries - Investors King

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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Economy

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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Northern Ethiopia - Investors King

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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