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Reactions as Dangote Asks Northern Govs to Combat Extreme Poverty

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Aliko Dangote - Investors King
  • Reactions as Dangote Asks Northern Govs to Combat Extreme Poverty

Africa’s richest man and President of the Dangote Group, Aliko Dangote, on Wednesday expressed concern about the high rate of poverty in the North, saying northern governors should wake up to address the problem.

Dangote stated this when he delivered a keynote address at the 4th edition of Kaduna Economic and Investment summit (KADInvest 4.0).

He noted that 60 per cent of northerners lived in extreme poverty, saying it was unacceptable for a people with vast arable land for agriculture to live in poverty.

The billionaire urged the governors to wake up and pull the region out of its current economic woes.

He said, “The North must focus on harnessing its massive agricultural potential in terms of both production and processing. No region with high such agricultural potential should be this poor.

“We have what it takes to turn around our fortunes and I pray all the 19 governors of the northern states will wake up and follow the footsteps of the Kaduna State Government.

“Given the vast arable land and conducive condition, I think in the next 10 years, agriculture can generate more revenue and prosperity than oil that we have now if we have the right commitment.”

He also told governments in the region to identify their areas of comparative advantage, adding that the provision of information and data on what was available in various states was equally necessary.

According to him, efforts should be made to encourage local investors because “they will attract foreign investors.”

Dangote said, “While the overall social economic consideration in the country is a cause for concern, the regional indicators are very alarming. In the north-western and north-eastern parts of Nigeria, more than 60 per cent of the population lives in extreme poverty.

“It is instructive to know that the 19 northern states, which account for over 54 per cent of the country’s population and 70 per cent of its landmass, collectively generated only 21 per cent of the total sub-national internally generated revenue in 2017.

“Northern Nigeria will continue to fall behind if the respective state governments do not move to close the development gap and that is why we are always saying that the biggest challenge we have and what we are always praying for is to have 10 governors like Mallam Nasir El-Rufai in the North.”

Yakasai, Balarabe Musa back Dangote

Meanwhile, elder statesman, Alhaji Tanko Yakasai, and a former governor of old Kaduna State, Alhaji Balarabe Musa, supported Dangote’s position.

In separate telephone interviews with one of our correspondents, in Abuja, on Wednesday, both men expressed displeasure with the way northern governors were administering their states.

Yakasai said, “We still have arable land and a growing population of young, energetic but jobless people roaming the streets but our governors are not providing the right kind of leadership to turn this population into a useful force in our farms.

“What is required of the Federal Government are the right policies as well as provision of power and other infrastructure because the governors own all the land in Nigeria and land is key to agriculture. Dangote is absolutely right.”

Also, Musa said, “I agree with Aliko Dangote, our governors are part and parcel of our problem especially in the area of corruption. These governors are engaged in massive stealing, corruption and waste of public resources.

“The North certainly has no business with poverty but we are certainly not making progress with the kind of leadership we have both at the federal level and in the various northern states today.”

At the event, President Muhammadu Buhari said the Federal Government would accord priority to economic recovery.

Buhari noted that the implementation of the economic recovery and growth plan would no doubt create sustainable jobs and prosperity for Nigerians.

Earlier in his remarks, El-Rufai assured the people of the state of his administration’s willingness to implement the suggestions made at the last edition of the KADinvest, especially the state development plan, the tax consolidation and the development of a digital land registry.

El-Rufai also announced that the state had attracted over $500m investments in four years in spite of the challenges confronting it.

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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Manufacturers Grapple with Losses Amid Economic Strain

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canada manufacturing

In the first three months of 2024, some of Nigeria’s major manufacturers found themselves navigating treacherous waters as financial losses mounted amidst economic turbulence.

According to data compiled by BusinessDay, rising interest rates and a further devaluation of the naira contributed to the woes of these industrial giants.

The latest financial reports from 13 listed consumer goods firms paint a grim picture, with seven of them collectively recording a staggering loss of N388.6 billion in Q1.

Names such as International Breweries Plc, Cadbury Nigeria Plc, and Nigerian Breweries Plc were among those that bore the brunt of the downturn.

On the flip side, a few companies managed to buck the trend. BUA Foods Plc, Unilever Nigeria Plc, and Dangote Cement Plc reported a combined profit of N171.9 billion, showcasing resilience amidst the challenging economic landscape.

While the overall revenue of these manufacturers saw an impressive 79 percent increase to N2.27 trillion, it was overshadowed by soaring financing costs.

In Q1 alone, finance costs skyrocketed to N616.5 billion from N65.8 billion in the same period in 2023.

Analysts attribute these mounting losses to the confluence of factors, including the devaluation of the naira and escalating interest rates. With the naira experiencing nearly a 30 percent devaluation this year alone, coupled with a 40 percent devaluation last June, companies faced intensified pressure on their margins.

Moreover, the Central Bank of Nigeria’s decision to raise the monetary policy rate to 24.75 percent in March further exacerbated the situation.

This marked the second consecutive increase, following a 400 basis points hike in February, aimed at curbing inflation.

The adverse effects of these economic headwinds were felt across various sectors. Nestle reported the highest finance cost of N218.8 billion, followed closely by Dangote Cement and Dangote Sugar Refinery.

Commenting on the challenging business environment, Uaboi Agbebaku, the company secretary at Nigerian Breweries, highlighted how increased interest rates and FX volatility led to a staggering 391 percent rise in net losses compared to the same quarter in 2023.

Looking ahead, manufacturers remain cautiously optimistic but vigilant. Thabo Mabe, managing director at NASCON, emphasized the importance of navigating the turbulent waters while executing robust strategies to ensure sustained growth.

As Nigeria grapples with economic uncertainties, the resilience of its manufacturing sector will play a pivotal role in shaping the nation’s economic trajectory.

However, concerted efforts from both the public and private sectors will be needed to steer the industry towards stability and growth.

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Shell Nigeria’s $1.09 Billion Tax and Royalty Payments Power Economic Growth

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Shell

Shell Petroleum Development Company of Nigeria Limited (SPDC) and Shell Nigeria Exploration and Production Company Limited (SNEPCo) paid a sum of $1.09 billion in corporate taxes and royalties to the Nigerian government in 2023.

This figure, revealed in the recently published 2023 Shell Briefing Notes, shows Shell’s commitment to supporting Nigeria’s development through substantial financial contributions.

According to the briefing notes, SPDC disbursed $442 million in taxes and royalties, while SNEPCo remitted $649 million.

Despite a decrease from the $1.36 billion paid in 2022, these payments highlight Shell’s continued role as a key contributor to Nigeria’s revenue generation efforts.

Osagie Okunbor, Managing Director and Country Chair of Shell Companies in Nigeria said “Shell companies in Nigeria will continue to contribute to the country’s economic growth through the revenue we generate and the employment opportunities we create by supporting the development of local businesses.”

The briefing notes also provided insights into Shell’s ongoing operations and initiatives in Nigeria. The company’s investments span more than six decades, with a focus on powering progress and promoting socio-economic development.

Through collaborations with stakeholders and communities, Shell aims to provide cost-effective and cleaner energy solutions while fostering sustainable growth.

“It is important to emphasize that Shell is not leaving Nigeria and will remain a major partner of the country’s energy sector through its deep-water and integrated gas businesses,” Okunbor reiterated, underscoring Shell’s long-term commitment to Nigeria’s energy landscape.

Shell’s contributions extend beyond financial payments, encompassing initiatives aimed at enhancing local capacity building, fostering job creation, and promoting social development. By prioritizing safe operations and environmental stewardship, Shell seeks to align its business objectives with Nigeria’s sustainable development goals.

As Nigeria navigates economic challenges and seeks avenues for growth, Shell’s substantial tax and royalty payments serve as a testament to the company’s enduring partnership with the Nigerian government and its commitment to driving economic progress.

Through continued collaboration and investment, Shell endeavors to play a pivotal role in Nigeria’s journey towards prosperity and sustainability.

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Federal Government Sets Two-Month Deadline for PoS Operators to Register with CAC

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Corporate Affairs Commission (CAC)- Investors King

The Federal Government, through the Corporate Affairs Commission (CAC), has issued a stringent directive mandating Point of Sales (PoS) operators to register their agents, merchants, and individuals within a two-month timeframe.

The move comes as part of efforts to comply with legal requirements and align with the directives of the Central Bank of Nigeria (CBN).

The decision was reached during a crucial meeting between representatives of the fintech industry and the Registrar-General of the CAC, Hussaini Ishaq Magaji, held in Abuja on Monday.

With over 1.9 million PoS terminals deployed nationwide by merchants and individuals, the registration requirement aims to bolster consumer protection measures and fortify the integrity of the financial ecosystem.

According to the Registrar-General, the initiative is in line with Section 863, Subsection 1 of the Companies and Allied Matters Act (CAMA) 2020, as well as the 2013 CBN guidelines on agent banking.

Speaking on the matter, Hussaini Ishaq Magaji emphasized that the registration deadline, set for July 7, 2024, is not intended to target specific groups or individuals but rather serves as a proactive measure to safeguard businesses and ensure regulatory compliance across the board.

In a statement released by the commission, it was highlighted that the collaboration between the Corporate Affairs Commission and fintech companies underscores a mutual commitment to upholding industry standards and fostering a conducive environment for financial transactions.

The decision to implement this registration requirement follows recent concerns over fraudulent activities involving PoS terminals, which accounted for 26.37% of fraud incidents in 2023, according to a report by the Nigeria Inter-Bank Settlement System Plc (NIBSS).

The directive from the Federal Government comes amidst a broader crackdown on financial irregularities, including the prohibition of cryptocurrency trading and heightened scrutiny of fintech operations by regulatory authorities.

Last week, major fintech firms were instructed by the CBN to halt onboarding new customers and to warn against cryptocurrency trading on their platforms.

The move by the CBN is part of a larger effort to enhance regulatory oversight and combat illicit financial activities, including money laundering and terrorism financing.

Prior to this directive, the Economic and Financial Crimes Commission (EFCC) had obtained court orders to freeze numerous bank accounts allegedly involved in illegal foreign exchange transactions.

In response to the directive, fintech firms have pledged to collaborate with regulatory authorities to ensure compliance with the registration requirement.

However, they have also stressed the importance of comprehensive sensitization efforts to educate stakeholders about the implications of non-compliance and the benefits of regulatory adherence.

As the deadline approaches, PoS operators are expected to expedite the registration process and ensure that all agents, merchants, and individuals are duly registered with the Corporate Affairs Commission, demonstrating a collective commitment to maintaining the integrity of Nigeria’s financial system.

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