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Fertiliser Imports Rise by 84% to N117b

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fertilizer - Investors King

Despite various measures to encourage local production, a total of about N117 billion (or $247.91 million) was expended on fertiliser importation in the past year.

Fertiliser imports increased by $37.71 million in 2019 to $247.91 million last year, representing an increase of 84.4 per cent.

Data by the International Trade Statistics (ITS) on imports showed breakdown of imports, according to country of origination to include Morocco, $128 million; Russia, $83.37 million; China, $17.15 million and Germany, which exported $11 million.

During the period, data by the Nigerian Ports Authority’s (NPA) shipping position shown three vessels offloaded 64,255 metric tonnes of fertiliser at the Lagos Port Complex.

The bulk of fertiliser was offloaded by at Apapa Bulk Terminal Limited (ABTL) and ENL Consortium terminal at Lagos Port Complex by three vessels.

At ENL terminal, MV Saros B offloaded 11,255 tonnes of the input, while Wariya Naree and Cengiz Bay discharged 42, 000 tonnes and 11,000 tonnes at the port.

In 2017, Nigeria imported 957,000 metric tonnes of the products through the ENL Consortium Terminal at the Lagos Port and JosepDam Terminal in Tincan Island Port.

The Federal Government had planned to save $1.2 billion yearly when it was discovered that the country’s plants have the capacity to produce over four million tonnes of Nitrogen, Phosphorus and Potassium (NPK) fertiliser yearly, while highest quantity being utilised by farmers was 1.5 million tonnes.

However, only N164 billion (or $350 million) had been saved from payments on subsidy and import substitution through the implementation of the Presidential Fertiliser Initiative (PFI).

Managing Director, Nigerian Sovereign Investment Authority (NSIA), Mr. Uche Orji, said the Presidency had approved the restructuring of PFI, starting in this year’s cycle with various modifications, following the successes recorded over the past four years.

Under the modifications, the NSIA was transitioned to an upstream player, thereby limiting its involvement to importation, storage and the wholesale of raw materials to blenders.

According to him, blenders would no longer be paid blending fees by NAIC-NPK, noting that they would recover their costs from selling the fertiliser to the market.

The blending plants are expected to provide bank guarantees to cover requisitioned raw materials demand that are appropriated for their respective production volumes.

Also, in line with the Presidential directive, the Federal Ministry of Finance Budget and National Planning and the Central Bank of Nigeria (CBN) are expected to engage commercial banks to facilitate lines of concessionary credits to blending plants for the purchase of raw materials and other equipment necessary for its production.

He stressed that 41 blending plants had been resuscitated from the initial four plants at project inception.

In addition, Orji said an estimated 250,000 direct and indirect jobs had been created across the agriculture value chain, including in logistics, ports, bagging, rail, industrial warehousing and haulage.

It would be recalled that in 2019, the Central Bank of Nigeria (CBN) had warned that no foreign exchange should be made available for funding fertiliser imports, noting that any company that imports the product would be sanctioned.

In the memo dated January 30, last year, signed by Director, Trade and Exchange Department, Mr. A. S. Jibrin, the apex bank reminded authorised dealers and the public that the ban on NPK fertiliser and any other variant remained in force.

When the order to ban importation of NKP to encourage local blending plants was introduced, the country in the immediate year saved N104.3 billion (or $285.9 million) in 2019.

Indorama Eleme Fertiliser and Chemicals and Dangote Petrochemicals and Fertiliser have already invested $4.5 billion to improve and boost the country’s fertiliser industry.

Dangote is expected to boost production by 2.8 million tonnes of fertiliser, while Indorama anticipated to produce1.4 million tonnes.

In 2016, Nigeria and Morocco had signed a memorandum of understanding (MoU) to help the former revive its ailing fertiliser industry through the supply of phosphates for local blending.

The MOU was consummated in 2018 during the visit of President Buhari to Morocco and had helped to revive 28 of the country’s comatose companies, which were primed to increase Nigeria’s production capacity.

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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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness - Investors King

Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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Private employers

As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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