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New Analysis Explores Nigeria’s Plans to Put Agriculture at the Heart of its Economy Development Plans

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Trade - Investors King

A new focus report, produced by Oxford Business Group (OBG) in partnership with Farmforte, maps out Nigeria’s plans to boost agriculture’s contribution to the economy through innovation and development finance.

Titled “The Report: Nigeria 2022, Agriculture“, the study looks at the key role earmarked for agri-tech in supporting the country’s efforts to ensure food security for its growing population and create a more diversified, industrialised economic base.

It highlights the growing number of investment and partnership opportunities emerging in areas that include finance, logistics and infrastructure development, as Nigeria moves to strengthen its agricultural value chain and drive sectoral expansion.

The report also analyses the local value-added activities that are ripe for growth and will help Nigeria meet domestic demand, while also paving the way for it to increase export revenue over time, which range from agro-processing to food and beverage manufacturing.

The African Continental Free Trade Area (AfCFTA) and the considerable potential it offers Nigeria to develop intra-continental agricultural trade in the coming years is another focus.

Subscribers will also find coverage of the challenges that producers currently face, which range from insufficient levels of irrigation and land tenure issues to limited implementation of research findings.

The report includes interviews with key industry representatives, including Osazuwa Osayi, Co-founder and Co-CEO, Farmforte, the Lagos-based, impact-oriented value chain development firm.

In the interview, Osayi shares his views on a range of topical issues, including what could be done to support small and medium-sized agricultural enterprises, which are seen as a vehicle for sustainable economic development and employment generation.

“During the Covid-19 pandemic farmers reduced market-oriented vegetable production, produced more vegetables for their own consumption, increased home processing and storage, explored new markets and accepted lower sales prices,” he said. “Socio-economic factors such as age, household size and marital status, as well as difficulty accessing inputs and perceptions of the effects of the pandemic, influenced farmers’ decisions to adopt particular coping strategies. With this in mind, in order to sustain vegetable supplies, policymakers should consider investing more in market-oriented strategies such as vegetable processing and storage, which individual farmers may not be able to afford due to high costs, as well as a lack of information and knowledge on good agronomic practices, post-harvest handling facilities, storage and market access.”

Karine Loehman, OBG’s Managing Director for Africa, said that although Nigeria’s agriculture sector displayed resilience during 2020-21, the Covid-19 crisis had heightened the issues surrounding food security in Nigeria, with supply-chain disruptions, limited transport, reductions in income and difficulty accessing credit just some of the issues faced across the sector.

“The pandemic has sharpened the focus on agri-tech, highlighting its benefits, especially for smallholder farmers and small agricultural enterprises, and accelerating the adoption of tech-led solutions,” she said. “Our report shows that there is widespread recognition of the part that agrarian activities could play in supporting Nigeria’s bid to reduce its reliance on oil and a will to return agriculture to its role of key contributor to economic growth.”

The report on Nigeria’s agriculture sector forms part of a series of tailored studies that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.

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Economy

August 2023 Witnesses Highest Revenue Allocation of the Year – N1.1 Trillion Shared

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

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Revenue - Investors King

The Federation Account Allocation Committee (FAAC) unveiled its allocation of N1.1 trillion to the three tiers of government for the month of August 2023, Investors King reports.

This substantial increase was detailed in a communiqué following the committee’s latest meeting. August allocation was the highest so far with an increase of N133.99 billion when compared to the N966.11 billion shared in July 2023.

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

Breaking down the N1.1 trillion total distributable revenue, the statement reveals that it consists of distributable statutory revenue amounting to N357.4 billion, distributable Value Added Tax revenue totaling N321.94 billion, Electronic Money Transfer Levy revenue at N14.10 billion, Exchange Difference revenue of N229.57 billion, and an augmentation of NN177.09 billion.

Of this impressive sum, the Federal Government is set to receive N431.25 billion, while the State governments will be allocated N361.19 billion, and the local government Councils will obtain N266.54 billion.

However, it’s essential to note that the total revenue available for August stood at N1.48 trillion, marking a 14% or 0.26 trillion decrease from the preceding month’s figure of N1.74 trillion.

The FAAC communiqué further underscores that various deductions were made, including N58.76 billion for the cost of collection, N254.05 billion for total transfers and refunds, and N71 billion allocated to savings. Additionally, the Excess Crude Account maintained a balance of $473,754.57.

The statement elaborated, “Gross statutory revenue of N891.934 billion was received for the month of August 2023. This was lower than the N1,150.424 billion received in July 2023 by N258.490 billion. The gross revenue available from the Value Added Tax was N345.727 billion. This was higher than the N298.789 billion available in July 2023 by N46.938 billion.”

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Zambia’s Finance Minister Faces Dual Challenge in Upcoming Budget Address

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Zambian economy

As Zambia’s Finance Minister, Situmbeko Musokotwane, prepares to present the nation’s budget, he finds himself at a pivotal crossroads.

The second-largest copper producer in Africa is grappling with two pressing concerns: debt sustainability and soaring living costs.

Debt Restructuring Dilemma: Musokotwane’s foremost challenge is finalizing the $6.3 billion debt-restructuring deal with official creditors, led by China and France.

Delays have hindered disbursements from the International Monetary Fund (IMF) and left private creditors in limbo.

To reassure investors, a memorandum of understanding with the official creditor committee is urgently needed.

President Hakainde Hichilema emphasizes the importance of sealing these transactions to signal closure on this tumultuous chapter.

Plummeting Tax Revenue: The key copper-mining industry, which accounts for 70% of Zambia’s export earnings, is in turmoil.

First-half mining company taxes and mineral royalty collections have nosedived, adding to economic woes.

This, in turn, has depreciated the local currency, exacerbating imported inflation, particularly in fuel prices.

Rising Food Inflation: Musokotwane faces mounting political pressure to combat soaring living costs, with annual inflation reaching an 18-month high of 12%. Corn meal prices, a staple in Zambia, have surged by a staggering 67% in the past year.

Neighboring countries’ demand for corn has led to smuggling and further price spikes, raising concerns about food security.

Currency Woes: The kwacha’s value has been a barometer for the nation’s economic health. It depreciated by 16% since June 22, the worst performance among African currencies, reflecting the ongoing debt-restructuring uncertainty.

In his budget address, Musokotwane faces the daunting task of striking a balance between debt management, economic stability, and alleviating the burden on Zambia’s citizens.

The international community will keenly watch to see if his fiscal measures can steer the nation toward a path of recovery and prosperity.

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IMF Urges Sub-Saharan African Nations to Eliminate Tax Exemptions for Fiscal Health

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IMF global - Investors King

Sub-Saharan African countries have been advised by the International Monetary Fund (IMF) to tackle their fiscal deficits by focusing on eliminating tax exemptions and bolstering domestic revenue rather than resorting to fiscal expenditure cuts, which could hamper economic growth.

The IMF conveyed this recommendation in a paper titled ‘How to avoid a debt crisis in Sub-Saharan Africa.’

The IMF’s paper emphasizes that Sub-Saharan African nations should reconsider their overreliance on expenditure cuts as a primary means of reducing fiscal deficits. Instead, they should place greater emphasis on revenue-generating measures such as eliminating tax exemptions and modernizing tax filing and payment systems.

According to the IMF, mobilizing domestic revenue is a more growth-friendly approach, particularly in countries with low initial tax levels.

The paper highlights success stories in The Gambia, Rwanda, Senegal, and Uganda, where substantial revenue increases were achieved through a combination of revenue administration and tax policy reforms.

The IMF also pointed out that enhancing the participation of women in the labor force could significantly boost Gross Domestic Product (GDP) in developing countries.

The IMF estimates that raising the rate of female labor force participation by 5.9 percentage points, which aligns with the average reduction in the participation gap observed in the top 5% of countries during 2014-19, could potentially increase GDP by approximately 8% in emerging and developing economies.

In a world grappling with the weakest medium-term growth outlook in over three decades, bridging the gender gap in labor force participation emerges as a vital reform that policymakers can implement to stimulate economic revival.

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