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Rice Producers Reveal Reasons For Price Hike, Seek Govt’s Subsidy

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Rice

Rice producers in the North East region of Nigeria have revealed reasons why price of rice continues to rise.

The rice farmers and processors described multiple taxes, high costs of electricity, and transportation of the food item to other parts of the state among others as causes of the incessant rise in price of the staple food.

Findings by Investors King showed that rice had been sold in 2018 in Nigeria at the rate of N14,000 per 50-kilogramme bag before it moved to N17,000 in 2019. But the price had gone up to N33,000.

The Federal Government had banned importation of foreign rice, thus giving a boost to the production of local rice that is positioned to replace foreign ones on Nigeria’s dietary palate.

Nigerians had thought that the price of rice would reduce since local production had been supported by the Federal Government, but the reverse appears to be case as farmers have identified government as one of the reasons for the continuous increase in the price of rice.

According to one of the rice farmers, Musa Arab, government bombarded producers of rice with multiple taxations, saying that it was creating more hardship for consumers in buying the item.

Arab, a leading rice farmer and processor in Gombe State and Northeast region, while explaining the peculiarities of rice production in Gombe, said multiple taxations were affecting flow of business in the state, adding that the industrial cluster area in Nasarawa were being inundated with different taxes by the state and local government officials.

According to him, once taxes were considered in the value chain of production, production prices automatically jacked up.

He advised the government to harmonise some of the taxes, so that once producers pay once, they don’t need to pay for another one.

Arab further explained that 50kg of rice is produced at the rate of N24,000, adding that after adding the cost of settling taxes from different quarters, it would add up to N26,000.

He said other factors that make rice price to increase are expensive transportation of the goods, saying that producers used to pay N800 per bag to Port Harcourt but now it is N2,500 per bag as a result of the high price of gas. He added that high cost of transportation also force the producers and retailers to review upward the price of the rice.

The farmer also decried epileptic power supply and high cost of electricity bill as reasons for skyrocketing price of rice.

He said in December, 2022, the rice farmers had an issue with Jos Electricity Distribution Company (JEDC) about the power supply, adding that the company installed prepaid metres for them instead of the old method of metering.

The rice producer said the cost of using prepaid metre was adding more pain to the farmers and that the electricity suppliers had been increasing electricity bills on the postpaid metres.

He called on the Federal and State Governments to subsidise the production of rice in the country for the ease of Nigerian Masses.

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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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