Economy

Nigeria’s Rising Palm Oil Production Boosts Local Market

Published

1 year ago

May 16, 2022

Nigeria’s local rising production of palm oil has reduced the importation of the goods from China, India, and Malaysia, thereby boosting the local market.

Recall that Nigeria initiated the backward integration program in 2011 as part of efforts to reclaim its losing effort among global palm oil producers. However, it wasn’t until 2018 that it got momentum.

Investors King, in 2019, gave a comprehensive data analysis of Nigeria’s palm oil importation in Q1 2019. While quoting a data released by the Malaysian Palm Oil Council (MPOC), Investors King reported that Nigeria’s palm oil import from the country rose by 57 percent to 112,480 metric tons (MT) in the first quarter of 2019, up from 47,974 MT recorded in the same quarter of 2018.

In light of this, industry experts said Nigeria’s crude palm oil production was less competitive when compared with the imported ones due to infrastructural limitations and the high cost of production.

This, experts blamed for the surge in the importation of foreign crude palm oil by local manufacturers who used CPO as raw materials.

However, the likes of PZ Wilmar, Dufil Prima Foods, Agric Palm Limited, Presco, and Okomu Oil Palm Company, among others, enacted significant changes through their investments in establishing backward integration projects.

Industry experts have noted that the constant decline in the volume of importation is as a result of the arrival of new players, as well as the significant expansions of existing plantation owners, which have helped in boosting local production.

Despite these developments, experts have noted that production is not keeping up with Nigeria’s rapidly growing population.

Former Executive Secretary of the Plantation Owners in Nigeria, Fatai Afolabi said: “There is no doubt that Nigeria’s palm oil production is increasing and will continue to be on the rise owing to the backward integration projects by many producers. This is reducing our importation.”

“Existing players like Okomu and Presco have doubled their plantations and increased production by 100 percent when compared to their status five years ago,” he added.

In Africa’s most populous country, about 90% of palm oil is used in food production, with the remaining 10% going to the non-foods business. This includes – detergent, Shampoo, Lipstick, and many more.

The national president of the Oil Palm Growers Association of Nigeria, Igwe Hilary Uche, explained that the recent investments in processing mills have resulted in a significant increase in palm oil production in the country.

“There is serious expansion by existing plantation owners and this is impacting our production,” he said.

“Production will further increase when the government starts giving much attention to smallholder farmers, that produce 80 percent of the country’s production, in the way it ought to,” he added.

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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.

Published

2 days ago

September 30, 2023

Temitayo Olukoya

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.”

Economy

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

Published

3 days ago

September 29, 2023

Samed Olukoya

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.

Economy

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

Published

4 days ago

September 28, 2023

Samed Olukoya

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.