Commodities

Nigeria Spends $2.13bn on Food Imports in 2023

Published

4 months ago

May 21, 2024

Samed Olukoya

The Central Bank of Nigeria (CBN) disbursed $2.13 billion for food imports in 2023.

This disclosure raises concerns about the nation’s ability to achieve self-sufficiency in food production.

Despite being touted as the “food basket of Africa,” Nigeria continues to rely heavily on imported food commodities.

The CBN’s quarterly statistics revealed a consistent demand for foreign currencies for food imports throughout the year.

The significant forex release for food imports stands in stark contrast to efforts by the Nigerian government to boost local agricultural production and reduce dependence on imports.

Factors such as inadequate infrastructure, insecurity, and climate change have hindered progress in the agricultural sector, leaving the nation vulnerable to fluctuations in global food prices.

A breakdown of the disbursements shows varying amounts allocated each month, with notable spikes observed in March and November.

Despite initiatives aimed at promoting local production, including the ban on food imports by the Federal Government, the nation’s appetite for foreign food products remains unabated.

The rise in food prices has also been a cause for concern, with the average price of imported food commodities reaching a 34% increase between April 2023 and April 2024.

This surge in prices has contributed to food inflation in Nigeria and across sub-Saharan Africa, highlighting the region’s vulnerability to global market dynamics.

Experts warn that Nigeria’s heavy reliance on food imports poses significant risks to its economy and food security.

Despite efforts to promote local production, challenges such as insecurity and inadequate infrastructure continue to impede progress in the agricultural sector.

Commenting on the issue, Kabir Ibrahim, the National President of the All Farmers Association of Nigeria, acknowledged that Nigeria has made strides in reducing its dependence on certain food items but expressed concern over the increasing trend in food imports.

He highlighted the challenges faced by farmers, including insecurity and flooding, which have affected food production and contributed to the rising import bill.

Yusuf Muda, the Managing Director of the Centre for the Promotion of Private Enterprise, emphasized the need for accurate data to assess Nigeria’s food import dependency accurately.

He called for a comprehensive analysis of the types of food imported and their contribution to the nation’s food consumption.

As Nigeria grapples with the challenges of food security and economic stability, addressing the root causes of its reliance on food imports remains a critical priority.

Efforts to strengthen the agricultural sector, improve infrastructure, and mitigate climate change impacts are essential for achieving long-term food security and economic resilience.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Commodities

Osun Government Tackles Gold Mining Company Over Alleged Tax Evasion

Published

1 day ago

September 26, 2024

Ugwoke Ogbodo

The Osun State Government has raised serious concerns about the operations of the Segilola Gold Project, managed by subsidiaries of Thor Explorations Ltd, a UK-based company listed on the Toronto Stock Exchange.

According to Prof. Lukman Jimoda, the Special Adviser to the Governor on Mining and Mineral Resources, the state’s investigation revealed various unethical business practices, including alleged tax evasion, use of proxies, and failure to comply with environmental rules and regulations.

The companies involved—such as SINIC Engineering, ATF Consulting, Monurent Nigeria, and others—are reportedly engaged in outsourcing employment and operations to undisclosed third parties without proper documentation or environmental compliance.

Prof. Jimoda highlighted that the federal constitution places environmental oversight under the concurrent list, allowing the state to assess companies’ operations for economic and environmental impacts.

He emphasised that the Segilola project, despite its significant production since 2019, has resisted complying with extant laws like the Personal Income Tax Act (PITA) and the Company Income Tax Act (CITA) which govern tax levies.

He also expressed concerns over pollution, including particulate emissions and possible acid drains from waste rocks, which pose serious environmental risks to the state.

The state government is therefore demanding the payment of accrued taxes and environmental development levies, as well as proper documentation for all involved parties.

The Special Adviser stressed that Osun has not received its due revenue from the Segilola project for over three years, despite its bankable gold production since 2019.

“The government is prepared to take necessary actions to ensure compliance and safeguard the state’s environmental and economic interests”, the Special Adviser noted.

Also speaking, the Financial Consultant to the Office of Mining and Mineral Resources, Dr. Wale Bolorunduro while presenting his report said the allegations against Thor Explorations Ltd and its subsidiaries mark a significant moment for Osun State, as the government seeks to reclaim its financial rights and ensure compliance with tax regulations.

Particularly troubling is the claim that Osun State’s interests in Tropical Mines Ltd were strategically diminished without due financial compensation, raising questions about the fairness of the company’s practices in Nigeria versus its compliance with international standards in the UK and Canada, where it is publicly listed,” Bolorunduro stated.

Governor Ademola Adeleke’s administration has emphasized the need for due payments to be made, while also ensuring that business operations continue smoothly. This balanced approach underscores the state’s willingness to foster investment, but not at the expense of its fiscal health or integrity.

Responding to the allegations that the Adeleke Dynasty is involved in the management of the Segilola Gold Project, Commissioner for Information and Public Enlightenment, Oluomo Kolapo Alimi denied the report, noting that those holding a stake or the other in the gold firm areas shortchanged the Osun state government.

Denying the allegations, the company noted that it has consistently demonstrated a commitment to being a law-abiding, transparent corporate entity, fulfilling all tax obligations and royalty payments in full and on time.

Segilola Country Manager, Austin Menegbo, said, “We maintain detailed records and have receipts for all royalty payments made to the Federal Government, as well as tax remittances to the State Government. These documents are readily available for verification.

“The claims of environmental and operational non-compliance are not true as we have sufficient evidence to prove that we have followed all necessary protocols for environmental assessments and regulatory filings, including environmental compliance monitoring and mitigation of potential environmental impacts. In addition, we are regularly audited by the Federal Ministry of Environment and the Ministry of Solid Minerals Development and to date, there has been no claim of pollution or environmental violations against the company.

“As one of Nigeria’s leading mining companies, we remain committed to contributing to the economic growth of the state and the country while adhering to the highest ethical and operational standards. We shall continue to maintain an open line of communication with relevant authorities to ensure that our operations are aligned with both federal and state laws.”

Commodities

Price of Cooking Gas Rises by 70%, Households and Small Businesses Suffer

Published

2 days ago

September 26, 2024

Bassey Marshall

Nigerians have expressed dissatisfaction over the continuous increase in the price of cooking gas.

Investors King gathered that despite the removal of Value Added Tax (VAT) on cooking gas since October 2023, the price of cooking gas continues to soar, now with a 70 percent increase as reported by the National Bureau of Statistics (NBS).

The price of refilling a 12.5kg cylinder of gas cost N9,194.41 as of 2023, however, as of August 2024, it surged to N15, 552.56, according to the National Bureau of Statistics (NBS).

This increase has had a great effect on households and small-scale businesses, including caterers and food vendors whose daily business depends on gas.

Many Nigerians have seized various opportunities to air out their frustration.

An X user, Abiodun Adeleke queried the sudden increase in the price of gas.

Adeleke, who wondered how Nigerians would be able to survive the economic hardship, observed that the recent increase in the price of the commodity reflects a 100 percent increase.

He wrote, “12.5kg cooking gas is now N19,000. Just months ago, it was N9,000. That’s a 100 percent hike in less than a year. How are people surviving this economy?”

Another user, Isaac Ajani with the handle @IsaacAJCityTexa tackled the FG’s claim of importing gas.

He wrote, “And FG/NNPC boasting they are exporting gas now,that Nig has huge quantity of natural gas,why d locals/residents are buying it higher,coal/dual purpose Dpk out of reach @1600perkg,in what way is FG relieving d residents of utility bills.”

Also sharing his frustration, another user with the handle @PerplexedNGN who claimed to be a resident of Lagos confirmed the increase describing it as crazy.

His words “I already bought ₦17,000 here in Lagos.

It’s honestly crazy. I don’t know where the common man will run to after this one too soon becomes unaffordable for the common man. 12.5kg gas was about ₦,3500-₦4,000 up until April/May 2022, just recently over 2 years ago.”

Food vendors and caterers are also feeling the heat.

Mary Olabuson, a caterer in Lagos State recounted how the price of cooking is affecting her business.

She recounted how she rejected a job after the price of cooking gas swallow most of the budget.

“I had a client call me for a job, but after calculating the cost, gas alone took up a huge chunk of the budget. In the end, I had to turn down the offer because the client couldn’t afford my revised rate,” she said.

Commodities

Rising Cocoa Prices Draw New Farmers, But Swollen Shoot Disease Remains a Threat

Published

1 month ago

August 19, 2024

Samed Olukoya

As the October cocoa harvest approaches, optimism is growing among West African farmers buoyed by soaring cocoa prices.

However, the industry faces persistent challenges, particularly from swollen shoot disease, which continues to threaten cocoa production despite favorable weather conditions.

Moussa Konate, a cocoa farmer from a small plantation in Ivory Coast, is seeing the fruits of a brighter season.

His trees are now laden with healthy, green pods, a promising sign after last year’s devastating crop loss due to disease.

The upcoming harvest is expected to be significantly better, buoyed by the arrival of essential pesticides and improved weather conditions attributed to the La Niña phenomenon.

Yet, while the outlook is improving, the cocoa industry in West Africa remains fraught with challenges. Swollen shoot disease, an incurable viral infection, remains a significant hurdle.

The disease reduces the yield of infected cocoa trees by up to 70% and is forcing many farmers to cut down not only diseased trees but also those nearby, as a preventative measure.

The economic landscape is more promising. Cocoa prices have surged to record levels, driven by ongoing supply shortages and increased demand.

Analysts forecast that prices could average around $7,000 per ton in 2024, a significant drop from the highs earlier this year but still well above historical norms.

This price surge is attracting new entrants into cocoa farming, particularly in regions like Cameroon and Nigeria, where farmers are reporting impressive yields and substantial earnings.

In contrast, established cocoa giants like Ivory Coast and Ghana are grappling with persistent issues.

Despite attempts to adjust farmgate prices and combat the disease, many farmers still struggle with limited resources.

The high costs of pesticides and fertilizers remain out of reach for many, and illegal mining activities, particularly in Ghana, are exacerbating the problem by destroying valuable agricultural land.

The broader West African cocoa belt is seeing mixed results. Early indicators suggest that Ivory Coast could experience a 10% increase in output this season, reaching about 2 million tons.

However, the spread of swollen shoot disease and irregular weather patterns pose ongoing risks.

In Ghana, where aging trees and diseases are also prevalent, farmers are calling for higher prices to support their operations and curb the impact of illegal mining, which threatens their land and livelihood.

Despite these challenges, there is a glimmer of hope. Improved weather conditions and rising prices are revitalizing the industry, drawing new investment and boosting the spirits of many farmers.

Nevertheless, experts emphasize the need for continued support and coordinated efforts to address disease management and sustainable farming practices to ensure the long-term health of the cocoa sector.