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Despite Recession, States, Others Spend Over N136.5bn on Hajj

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  • Despite Recession, States, Others Spend Over N136.5bn on Hajj

At least N136.5bn has been spent on Hajj in 2017 by state governments and individuals despite the current recession in the country, investigation has revealed.

According to the National Hajj Commission of Nigeria, no fewer than 91,000 Nigerians had arrived in Saudi Arabia out of the over 1.7 million foreign pilgrims in the country to perform this year’s Hajj. Meanwhile, the average Hajj fare approved by NAHCON to states for each traveller is N1.5m.

For example, information made available by NAHCON showing the approved 2017 Hajj seats and fares per state disclosed the package for travellers from Nasarawa State as N1,544,659.85; Niger, N1,525,483.30; Ondo, N1,485,096.07; Katsina, N1,498,502.70; Bauchi, N1,523,122.41; Plateau, N1,529,036.80; Sokoto, N1,521,461.65; and Kwara, N1,501,571.27, among others.

Therefore, at an average fare of N1.5m, 91,000 Nigerians would have spent a minimum of N136.5bn on the exercise, with part of it coming from public purse provided by state governments.

Although going on Hajj at least once in a lifetime is one of the five pillars of Islam, the Quran described it as a religious obligation that is meant for the faithful who can afford it. Meanwhile, visiting Jerusalem for pilgrimage is not an obligation for Christians. However, state governments have been sponsoring people to Mecca and Jerusalem for pilgrimage. Also, investigation revealed that Katsina, Bauchi, Plateau and Sokoto states had sponsored people on pilgrimage this year.

For instance, Governor Aminu Masari of Katsina State recently disclosed that his administration had been subsidising Hajj exercise for Muslims with N1bn annually.

Masari, while inaugurating an 18-member board for the Katsina State Pilgrims’ Welfare Board, had said no amount spent on religious activities could be considered as too much and described pilgrimage to Mecca as “neither a picnic nor a holiday, but an act of worship, as enshrined in the Holy Quran and the Sunnah of Prophet Muhammad.”

Similarly, the Bauchi State Government spent over N262,650,000 as subsidy on the state’s Muslim pilgrims to this year’s Hajj.

Governor Mohammed Abubakar had disclosed this while delivering his farewell address to 3,090 pilgrims, where he boasted that the state could afford the sponsorship despite the economic recession.

“Despite the economic hardship situation, this administration has continued to fund the operation of the state Pilgrims Welfare Board, both at home and at the holy land, so as to guarantee your comfort and satisfaction.

“We have also subsidised the cost of your accommodation in Mecca, upon which the government had to pay at least the sum of 850 Saudi Riyals (N85,000) for each of you so that you will be accommodated in a beautiful edifice close to the Haram,” Abubakar had said.

Also this year, the Plateau State Government went back on its 2015 decision to no longer sponsor both Muslims and Christians on pilgrimage due to the dwindling economic fortune of the state.

It was reported that the state government had sponsored 616 Muslims for the 2017 Hajj, with the state governor, Simon Lalong, saying at a farewell ceremony for the pilgrims from the state that the state government was willing to make the “sacrifice as a result of the relevance of holy pilgrimage to the citizens of the state.”

The Sokoto State Government had spent N91m to sponsor 90 Islamic clerics to the lesser Hajj in June.

The state Commissioner for Religious Affairs, Alhaji Mani Katami, had also announced that each of the benefiting clerics was entitled to a Basic Travelling Allowance of N250,000.

State governments’ sponsorship of pilgrimage has been going on for long. Last year, the Executive Secretary, Taraba State Muslim Pilgrims Welfare Board, Alhaji Umar Leme, said the state government had released N288.5m to sponsor about 166 persons on Hajj.

In 2014, the Borno State Government said it had spent about N500m to secure good accommodation and welfare for 2,645 pilgrims to Mecca, and that 300 Saudi Riyals (N30,000) were given to each of them to enable them to slaughter rams during Hajj.

The Niger State Government in 2013 said it had spent about N5.1bn in the previous six years to subsidise Muslim and Christian pilgrimages to Mecca and Jerusalem respectively.

In his defence of the expenditure, the then governor of the state, Babangida Aliyu, had described the sponsorship as the only avenue through which some people would benefit from the government.

“They do not benefit from electricity, housing, roads and other infrastructure; they only benefit directly from the government through subsidy on pilgrimage,’’ he had said.

It was also learnt that even the Federal Government in 2016 subsidised the cost of pilgrimage for 65,167 persons with a concession of N121.9 for a maximum of $1,000 per person. The pilgrims enjoyed a concessionary rate of N197 to a dollar as the official exchange rate was N318.9 to a dollar.

Meanwhile, the Executive Chairman of NAHCON, Alhaji Abdullahi Muhammad, on Friday commended the Saudi Arabian authorities for providing all the necessary logistics support for pilgrims at the Jamarat, the place where pilgrims perform the symbolic stoning of the devil.

He also commended the authorities for placing sprinklers at strategic locations for pilgrims, saying it would go a long way in reducing the effects of the hot weather being experienced in the country.

He, therefore, appealed to Nigerian pilgrims to maintain good behaviour while in the country as they had done so far.

But the sponsorship of pilgrimage is increasingly becoming a subject of controversy with the dwindling economic fortune in the country and the subsequent resolution by some states including Niger, Lagos, Kaduna and Kano to abolish it.

However, not all states that claimed to have stopped the sponsorship of pilgrimage have been able to fully commit to the resolution.

Even though, the Governor of Kano State, Abdullahi Ganduje, said in September 2016 that the state government had abolished sponsorship of Hajj, he added that it had not stopped sponsoring clerics and medical personnel on Hajj and had spent N3bn that year.

“So, the services we are providing and the Pilgrims Welfare Agency officials we are sponsoring, the medical (members of) staff and all the medication, if you add all together, you will see that we spent over N3bn,” he had said.

“So, during our last administration, we cancelled it (sponsorship of pilgrimage). In fact, I was the one who made the announcement and some people thought heavens would fall because we cancelled it. And when I came in, we did not have any problem because people are used to it. So, the only people we can sponsor are stakeholders, medical team, the Ulamas who are preaching here and the civil servants from the Pilgrims Welfare Agency.”

The Kaduna State Government has also cancelled the annual sponsorship of pilgrims to Mecca and Jerusalem and feeding of Muslim faithful during Ramadan, with the state governor, Nasir el-Rufai, saying the government could no longer afford such luxury.

Stressing the financial burden of such sponsorships on the state, el-Rufai had in 2015 said that in the previous year alone, the state government and the state’s 23 local government areas had sponsored over 2,000 pilgrims to Hajj and 800 others to Jerusalem at a cost that was “nearly N1.5bn.”

The Executive Chairman of CACOL, Mr. Debo Adeniran, described the state sponsorship of pilgrimage as a form of corruption, which must be stopped.

He said, “There are so many atrocities various administrations have been committing, including the sponsorship of pilgrimage. Such atrocities start from lowering the exchange rate for pilgrims. There is no government that has the authority to spend public funds on frivolities like religious tourism. Nigeria doesn’t have any religion, so any public fund spent on religious activities, building religious worship places and so on are resources wasted, misspent, misappropriated.

“Every public office holder who has funded any religion has misappropriated resources and they are liable to be charged for misappropriation of funds. So the amount that is being expended on Hajj would have been able to fix some dilapidated roads, educational facilities, and so on. What is the country benefiting from religious pilgrimages and all that?

“We are only improving the economies of countries such as Saudi Arabia and Israel while we are spending our resources unwisely. This is wasteful, unnecessary and reprehensible. Nigeria should stop it once and for all and that should be the focus of the present administration because putting money in things that are not right is misappropriation of funds. It is corruption and should be stopped.”

The President of the Muslim Congress, Nigeria, Dr. Lukman Abdurraheem, also described state sponsorship of the Hajj exercise as fraudulent.

He said it was wrong to use taxpayers’ money to send people on pilgrimage, adding that most states were using the exercise to steal state resources.

He said, “We believe that state sponsorship of Hajj is a fraudulent practice. If you go by what the Holy Quran says, we should only visit Kaaba (a building at the centre of the Sacred Mosque in Mecca, Saudi Arabia) if we have the means to do so.

“The government doesn’t have to sponsor Muslims on Hajj; its role is to provide good roads, electricity, potable water and other social amenities. States are only using pilgrimage sponsorship to steal money. Any religious person will tell you it’s wrong to use taxpayers’ funds to send people on pilgrimage. That’s why I commend states like Lagos for stopping it.”

Chairman, Osun State Board of Traditional Medicine, Chief Kayode Esuleke, also condemned the situation, saying it shows bias against the traditional religion worshippers.

“We are misappropriating public funds by sponsoring some people on pilgrimage. What the Quran says is that Muslim faithful should visit Mecca once in their lifetime if they can afford it, and not that they should be sponsored with taxpayers’ money.

“Is it right that our collective money should be used to sponsor Muslims and Christians on pilgrimage? It shows bias towards some religions. The money spent by states to sponsor pilgrims will solve some of the problems we have with infrastructure,” Esuleke said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Steady as Israel-Hamas Ceasefire Talks Offer Hope, Red Sea Attacks Persist

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markets energies crude oil

Amidst geopolitical tensions and ongoing conflicts, oil prices remained relatively stable as hopes for a ceasefire between Israel and Hamas emerged, while attacks in the Red Sea continued to escalate.

Brent crude oil, against which Nigerian oil is priced, saw a modest rise of 27 cents to $88.67 a barrel while U.S. West Texas Intermediate crude oil gained 30 cents to $82.93 a barrel.

The optimism stems from negotiations between Israel and Hamas with talks in Cairo aiming to broker a potential ceasefire.

Despite these diplomatic efforts, attacks in the Red Sea by Yemen’s Houthis persist, raising concerns about potential disruptions to oil supply routes.

Vandana Hari, founder of Vanda Insights, emphasized the importance of a concrete agreement to drive market sentiment, stating that the oil market awaits a finalized deal between the conflicting parties.

Meanwhile, investor focus remains on the upcoming U.S. Federal Reserve’s policy review, particularly in light of persistent inflationary pressures.

Market expectations for any rate adjustments have been pushed out due to stubborn inflation, potentially bolstering the U.S. dollar and impacting oil demand.

Concerns over demand also weigh on sentiment, with ANZ analysts noting a decline in premiums for diesel and heating oil compared to crude oil, signaling subdued demand prospects.

As geopolitical uncertainties persist and market dynamics evolve, observers closely monitor developments in both the Middle East and global economic policies for their potential impact on oil prices and market stability.

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Crude Oil

Oil Prices Sink 1% as Israel-Hamas Talks in Cairo Ease Middle East Tensions

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Crude oil - Investors King

Oil prices declined on Monday, shedding 1% of their value as Israel-Hamas peace negotiations in Cairo alleviated fears of a broader conflict in the Middle East.

The easing tensions coupled with U.S. inflation data contributed to the subdued market sentiment and erased gains made earlier.

Brent crude oil, against which Nigerian oil is priced, dropped by as much as 1.09% to 8.52 a barrel while West Texas Intermediate (WTI) oil fell by 0.99% to $83.02 a barrel.

The initiation of talks to broker a ceasefire between Israel and Hamas played a pivotal role in moderating geopolitical concerns, according to analysts.

A delegation from Hamas was set to engage in peace discussions in Cairo on Monday, as confirmed by a Hamas official to Reuters.

Also, statements from the White House indicated that Israel had agreed to address U.S. concerns regarding the potential humanitarian impacts of the proposed invasion.

Market observers also underscored the significance of the upcoming U.S. Federal Reserve’s policy review on May 1.

Anticipation of a more hawkish stance from the Federal Open Market Committee added to investor nervousness, particularly in light of Friday’s data revealing a 2.7% rise in U.S. inflation over the previous 12 months, surpassing the Fed’s 2% target.

This heightened inflationary pressure reduced the likelihood of imminent interest rate cuts, which are typically seen as stimulative for economic growth and oil demand.

Independent market analysts highlighted the role of the strengthening U.S. dollar in exacerbating the downward pressure on oil prices, as higher interest rates tend to attract capital flows and bolster the dollar’s value, making oil more expensive for holders of other currencies.

Moreover, concerns about weakening demand surfaced with China’s industrial profit growth slowing down in March, as reported by official data. This trend signaled potential challenges for oil consumption in the world’s second-largest economy.

However, amidst the current market dynamics, optimism persists regarding potential upside in oil prices. Analysts noted that improvements in U.S. inventory data and China’s Purchasing Managers’ Index (PMI) could reverse the downward trend.

Also, previous gains in oil prices, fueled by concerns about supply disruptions in the Middle East, indicate the market’s sensitivity to geopolitical developments in the region.

Despite these fluctuations, the market appeared to brush aside potential disruptions to supply resulting from Ukrainian drone strikes on Russian oil refineries over the weekend. The attack temporarily halted operations at the Slavyansk refinery in Russia’s Krasnodar region, according to a plant executive.

As oil markets navigate through geopolitical tensions and economic indicators, the outcome of ongoing negotiations and future data releases will likely shape the trajectory of oil prices in the coming days.

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Commodities

Cocoa Fever Sweeps Market: Prices Set to Break $15,000 per Ton Barrier

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Cocoa

The cocoa market is experiencing an unprecedented surge with prices poised to shatter the $15,000 per ton barrier.

The cocoa industry, already reeling from supply shortages and production declines in key regions, is now facing a frenzy of speculative trading and bullish forecasts.

At the recent World Cocoa Conference in Brussels, nine traders and analysts surveyed by Bloomberg expressed unanimous confidence in the continuation of the cocoa rally.

According to their predictions, New York futures could trade above $15,000 a ton before the year’s end, marking yet another milestone in the relentless ascent of cocoa prices.

The surge in cocoa prices has been fueled by a perfect storm of factors, including production declines in Ivory Coast and Ghana, the world’s largest cocoa producers.

Shortages of cocoa beans have left buyers scrambling for supplies and willing to pay exorbitant premiums, exacerbating the market tightness.

To cope with the supply crunch, Ivory Coast and Ghana have resorted to rolling over contracts totaling around 400,000 tons of cocoa, further exacerbating the scarcity.

Traders are increasingly turning to cocoa stocks held in exchanges in London and New York, despite concerns about their quality, as the shortage of high-quality beans intensifies.

Northon Coimbrao, director of sourcing at chocolatier Natra, noted that quality considerations have taken a backseat for most processors amid the supply crunch, leading them to accept cocoa from exchanges despite its perceived inferiority.

This shift in dynamics is expected to further deplete stocks and provide additional support to cocoa prices.

The cocoa rally has already seen prices surge by about 160% this year, nearing the $12,000 per ton mark in New York.

This meteoric rise has put significant pressure on traders and chocolate makers, who are grappling with rising margin calls and higher bean prices in the physical market.

Despite the challenges posed by soaring cocoa prices, stakeholders across the value chain have demonstrated a willingness to absorb the cost increases.

Jutta Urpilainen, European Commissioner for International Partnerships, noted that the market has been able to pass on price increases from chocolate makers to consumers, highlighting the resilience of the cocoa industry.

However, concerns linger about the eventual impact of the price surge on consumers, with some chocolate makers still covered for supplies.

According to Steve Wateridge, head of research at Tropical Research Services, the full effects of the price increase may take six months to a year to materialize, posing a potential future challenge for consumers.

As the cocoa market continues to navigate uncharted territory all eyes remain on the unfolding developments, with traders, analysts, and industry stakeholders bracing for further volatility and potential record-breaking price levels in the days ahead.

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