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Smuggling, Biggest Challenge to Local Rice Production —FG

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Rice
  • Smuggling, Biggest Challenge to Local Rice Production —FG

The Federal Government has identified smuggling of rice mainly from Thailand and India as the biggest challenge facing rice production in the country.

According to the Minister of Information and Culture, Alhaji Lai Mohammed, smuggled rice from the two countries comes into Nigeria through the country’s borders with Benin, Niger and Cameroon.

He said at a press conference in Lagos that over two million metric tonnes of parboiled rice were smuggled into Nigeria in 2017, according to the Rice Millers Importers and Distributors Association of Nigeria.

The minister said, “Let’s look at rice smuggling through Benin. The total demand for white rice (white rice is consumed in Benin, against parboiled rice in Nigeria) is 400,000 MT. Yet the country, with a population of about 11 million, imports between 1million and 1.2 million MT of rice annually. Who are they importing for? Nigerians, of course.

“In fact, as Nigeria’s rice import falls, Benin’s rice import increases. Most of the parboiled rice imported by Benin eventually lands in Nigeria through smuggling. Both Cameroon and Benin Republics have lowered tariff payable on rice to zero and five per cent respectively to encourage importation and subsequent smuggling of the product into Nigeria.”

According to Mohammed, smuggled rice currently costs between N11,000 and N13,000 per 50kg bag, while Nigerian processed rice sells for between N14,500 and N15,000 per 50kg bag.

He said, “Smuggled rice is sourced mainly from Thailand and India, which gives a high level of subsidies to rice farmers and rice processors. Local rice producers have made some representation to the government on how Nigerian rice can compete favourably, in terms of pricing, with the heavily subsidised imported rice.

“The country has never been closer to self-sufficiency in rice, a national staple, than now. Our target is to achieve self-sufficiency in our paddy production in two years, by 2020.

“This has been made possible by the purposeful leadership of President Muhammadu Buhari, who has consistently said that this nation must produce what it consumes.”

Buhari launched in November 2015 the Anchor Borrowers’ Programme, which aims to provide farm inputs, in cash and kind, to small-holder farmers to boost local production of commodities, including rice, stabilise inputs supply to agro-processors and address the country’s negative balance of payments on food.

The minister said the exponential growth in local rice production had moved the country closer to ending rice importation.

He said, “Within two years, rice importation from Thailand fell from 644,131 MT (in September 2015) to 20,000 MT (in September 2017). That’s over 90 per cent drop. So far, less than N100bn has been spent on the Anchor Borrowers’ Programme that has achieved so much.

“Meanwhile, in April 2008, the Federal Government had to quickly release N80bn from the Natural Resources Development Fund to import 500,000 MT of rice in order to cushion what it said was the effect of a global disaster. Imagine that we have ploughed that money into rice production in 2008. We would have been exporting rice by now.

He said according to the Rice Processors Association of Nigeria, the number of rice farmers had increased from five million in 2015 to over 11 million, with a total investment in excess of N300bn.

Mohammed said, “Nigeria’s rice paddy production has seen significant growth in the past three years, from four million MT to seven million MT. The country’s rice import bill, hitherto at $1.65bn annually, has dropped by over 90 per cent, with current consumption of approximately six million MT of milled rice.

“In 2015, Nigeria produced 2.5 million MT of milled rice. By 2017, it rose to four million MT, leaving a gap of two million MT. Our target is to fill that gap by 2020. In 2015, there were only 13 integrated mills. By 2017, the number rose to 21, after eight more were added.”

The minister described fertiliser production in the country as a success story, noting that President Buhari set up the Presidential Fertiliser Initiative in December 2016 to deliver commercially significant quantities of affordable and high-quality fertiliser at the right time to the Nigerian farmer.

He noted that the agricultural sector and the country’s food production were negatively impacted in 2016, saying farmers became exposed to high and rising prices for key agric inputs.

Mohammed said, “In 2017, PFI delivered 10 million 50kg bags (500,000MT) of NPK 20:10:10 fertiliser at a price of N5,500 in time for the wet season. That’s down from the price of N9,000 per 50kg bag in 2016 — a 40 per cent reduction in price. In 2018, PFI targets the delivery of 20 million 50kg bags (1 million MT), double the figure for 2017.

“Before PFI, each imported fertiliser bag was subsidised to the tune of N6,000 per bag. In 2017, PFI saved the government N60bn in would-be subsidies.”

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.

Business

Portland Paints, Chemical and Allied Products Plc Agreed to Merge

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Portland Paints

Portland Paints, Chemical and Allied Products Plc Agreed to Merge

Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.

In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).

Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.

“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.

“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”

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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

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Shell

Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.

The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.

It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.

The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.

A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.

In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.

“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.

Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.

“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.

“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”

Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.

Also, read Transcorp Plc Acquires FGN’s 100% Equity in Afam Power for N105 Billion

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Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

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Institute of Chartered Shipbrokers

Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.

Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.

Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.

He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.

“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.

According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.

After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.

The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.

Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.

Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.

“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”

He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.

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