Connect with us

Business

Smuggling, Biggest Challenge to Local Rice Production —FG

Published

on

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.”

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.

Continue Reading
Comments

Company News

MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

Published

on

MicroStrategy- Investors King

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.

Continue Reading

Company News

Geregu Power Plc Announces N14.46bn Profit in Q1 2024

Published

on

Geregu Power Plc

Geregu Power Plc has announced a profit of N14.46 billion for the first quarter (Q1) of 2024.

This represents a 307% increase when compared to the same period last year.

The power-generating company, known for its pivotal role in Nigeria’s energy sector, disclosed its outstanding financial results in its interim financial statement filed with the Nigerian Exchange Limited on Tuesday.

This disclosure comes shortly after the firm’s Deputy Chief Executive, Julius Omodayo-Owotuga, hinted at the promising financial outlook during the company’s recent annual general meeting held in Lagos.

According to the interim report, Geregu Power Plc’s revenue surged to N50.42 billion in the first quarter of 2024, representing an increase of 254.37% year-on-year appreciation.

The company’s net finance income transitioned from a negative position to N133.61 million. This positive momentum was supported by a moderation in finance costs, which decreased from N3.141 billion to N2.29 billion as of March 2024.

Speaking to stakeholders at the recent annual general meeting, Femi Otedola, Chairman of Geregu Power, expressed satisfaction with the company’s exceptional financial performance in 2023.

Otedola highlighted the board’s decision to propose a dividend distribution of N8 per share for the 2023 financial year as a testament to their commitment to rewarding shareholders and confidence in the company’s future prospects.

The robust financial results for the first quarter of 2024 further solidify Geregu Power’s position as a leading player in Nigeria’s energy landscape.

The company’s commitment to operational excellence, strategic investments, and adherence to international standards, such as obtaining ISO 9001 and 14001 certifications from the Standard Organisation of Nigeria, underscores its dedication to driving sustainable growth and value creation.

Continue Reading

Company News

Guaranty Trust Holding Company Plc Records N609.3bn Profit Before Tax in 2023

Published

on

GTCO Commemorates Listing on Nigerian Exchange - Investors King

Guaranty Trust Holding Company Plc (GTCO) has announced a strong profit before tax (PBT) of N609.3 billion for the 2023 financial year.

This represents an increase of 184.5 percent when compared to the previous year.

The audited consolidated and separate financial statements filed with the Nigerian Exchange Group and London Stock Exchange on Monday revealed market capitalization exceeded N1 trillion on the NGX to further solidify GTCO’s position as one of the top financial holding companies in Nigeria.

During the period under review, the group’s post-tax profit rose by 218.99 percent to N539.65 billion from N169.17 billion in 2022.

Key indicators such as loans and advances increased by 31.5 percent to N2.48 trillion, while deposits grew by 63.7 percent to N7.55 trillion.

The group’s total assets and shareholders’ funds closed at N9.7 trillion and N1.5 trillion, respectively.

Despite the challenging economic environment, GTCO maintained a strong capital adequacy ratio of 21.9 percent.

Also, the group sustained asset quality, with IFRS 9 Stage 3 loans improving to 4.2 percent in December 2023 from 5.2 percent in the same period of the prior year.

However, the cost of risk experienced an uptick, rising to 4.5 percent from 0.6 percent in December 2022, largely due to worsening macroeconomic factors.

Despite these challenges, GTCO’s pre-tax return on equity stood at 50.6 percent, while pre-tax return on assets was 7.6 percent. The cost-to-income ratio remained favorable at 29.1 percent.

Commenting on the financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of GTCO, expressed satisfaction with the company’s performance amidst a challenging operating environment.

He attributed the strong performance to the successful implementation of the group’s business model across banking and non-banking business verticals.

“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld,” he stated.

“In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.

In line with its commitment to shareholders, GTCO announced a final dividend of N2.70k, bringing the total dividend for 2023 to N3.20k.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending