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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

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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