The International Monetary Fund (IMF ) has stated that Africa needs about $425 billion to recover from the Covid-19 Pandemic.
Speaking at the latest Sub-Saharan Africa Regional Economic Outlook in Abuja, Ari Aisen, IMF’s Resident Representative for Nigeria explained that African countries were at the risk of falling further behind in terms of development, now that the world economy was faced with unprecedentedly high energy and food prices.
He outlined the economic activities of Nigeria and Africa at large – revealing that the funds they provide have done a lot to help African countries, south of the Sahara by allocating $23 billion in SDRs and intending to re-channel an additional $100 billion in SDRs from rich countries.
He explained that Nigeria had access to as much as $6. 8 billion in facilities between 2020, in the wake of the COVID-19 Pandemic till date from the IMF. Nigeria received $3. 4 billion in Special Drawing Rights and a similar amount as a loan from the Fund.
“with unrivaled potential for renewable energy and an abundance of minerals, a successful transition offers opportunities for diversification and job creation; ensuring the green transition is also a just transition,” he said.
However, Aisen noted that Africa needs $425 billion to recover from the COVID-19 pandemic, in addition to $30–50 billion per year for climate adaptation and $ 6-10 billion annually for commodity imports.
Furthermore, Aisen diverged into the oil sector, revealing that Nigeria could pay out as much as N6 trillion in oil subsidies in 2022 if oil prices continue to rise and urgent actions are not taken to reverse the trend.
Investors King gathered that the amount is roughly a third of the N17.319 trillion federal government budget for 2022, with nearly N6.9 trillion in scheduled recurrent spending and N5.96 trillion in capital outlay.
According to him, with a monthly petrol subsidy bill of N500 billion, the country might end the year with a record N6 trillion subsidy.
He did, however, express optimism that if the Dangote Refinery can begin operations within the year as anticipated, it will assist reduce gasoline imports and subsidy burdens.
Nigeria’s Untapped Coffee Sector Holds the Key to $2 Billion Annual Revenue
Amidst declining foreign reserves and the need for alternative revenue streams, Nigeria’s overlooked coffee industry emerges as a potential powerhouse capable of contributing over $2 billion annually to foreign exchange earnings.
Industry experts emphasize the necessity for strategic investments and modernized farming practices to unlock the full economic potential of the coffee sector.
While Nigeria is not among the top 10 coffee producers in Africa, the country’s untapped coffee industry holds the promise of significant financial gains, job creation, and sustainable agricultural development.
The urgency for revitalization comes as Nigeria grapples with a decline in foreign reserves, dropping from $38.25 billion in September 2022 to $33.23 billion in the third quarter of 2023.
Salihu Imam, Chairman of the National Coffee and Tea Association of Nigeria, Oyo State, highlighted the global significance of coffee, stating, “Coffee is the second most traded/valuable of all commodities and first in Agricultural commodities in the world.”
The potential economic impact extends beyond immediate financial gains, with Nigeria positioning itself as a key player in the global coffee trade.
Despite its potential, Nigeria’s coffee exports remain modest, producing less than one million bags annually.
In contrast, Ethiopia, the largest coffee exporter in Africa, is projected to produce 8.25 million bags. Experts suggest that Nigeria, with its unique coffee varieties, could generate $2 billion annually.
Segun Lary-Lean, President of the West Africa Specialty Coffee Association, emphasized the robust global demand for coffee, comparing it to water in Western countries.
He noted the significant earnings of coffee-producing nations like Brazil, Colombia, Vietnam, and Kenya, which experienced a 17% increase in coffee earnings.
In a call to action, industry players urge the Federal Government to prioritize strategic investments, modernized farming practices, and value-added processing to harness the coffee sector’s full economic benefits.
Unlocking the potential of Nigeria’s coffee industry stands not only as a financial opportunity but as a catalyst for broader economic growth and diversification.
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