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Nigeria Spends over $100m Annually to Import Sugar, Says Emefiele

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  • Nigeria Spends over $100m Annually to Import Sugar

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has declared that the apex bank is ready to partner the Lee Group and Jigawa State Government to ensure the establishment of a multi-billion naira white refined sugar cane factory that will generate N60 billion annually to the state.

Emefiele who spoke during the foundation laying ceremony of the 12,000 hectres of land in Garin Chiroma in Gagarawa Local Government Area of the state on Sunday, also regretted that Nigeria spends over $100 million annually for the importation of sugar which can be grown in the country.

According to him, “Nigeria today spends over $100 million importing sugar in the country whereas we can grow sugar Nigeria.”

He commended the Lee Group for investing in sugar production in Nigeria, saying, “by this initiative, you have helped in joining the Federal Government of Nigeria towards ensuring that we achieve our goal of diversifying away our economy from oil into a very important sector which is called agriculture.

“You (Lee Group) have touched the heart of Nigerians, you have touched the heart of the president, you have touched the heart of the federal government because through the clarion call of the president, you have answered that call and I can assure you that you will receive the needed support from the government.

“On our part as the CBN, I appeal to you to come over to us, whatever support you need to get this project on ground, so that in the next couple of months, we can come back and launch the programme, that support I assure you today, you will get from the CBN.”

Emefiele said sugar production is part of CBN’s core aspect of the anchor-borrower programme, while commending the Lee Group and Jigawa State government to have keyed into large-scale sugar production.
He added that CBN has concluded plans to support small farmers who are into sugar cane farming, “we will support not only Lee Group; we will also support other little farmers that are involved in sugar-cane planting so that as the farmers plant your sugar-cane, the Lee Group can also buy them off the farmers.

“Through that means, we have provided jobs for our people; and we have increased the wealth of our people. That is the anchor programme of the federal government and I want to thank all of you for being here today.”

The CBN governor who hailed Governor Muhammad Badaru Abubakar for investing in agriculture, said: “Jigawa State is doing its best; even using its own little resources to support the efforts of the federal government in the anchor-borrower programme for rice.

“Only a couple of months ago, we were here in Jigawa State to see the harvesting of rice, today we have seen a foundation laying ceremony for a 12,000 hectres of land for growing sugar-cane. I congratulate you, Badaru and I can only assure you that whatever support you need from CBN, you will get from us.”

Speaking at the occasion, Badaru described the factory as an industrial complex which is designed to generate an all-year round employment, with over 15,000 workforce, just as 12 settlements have already been relocated and compensated.

The Minister of Agriculture, Chief Audu Ogbeh, noted that the cultivation of sugar, rice, wheat and milk form part of the 2017 budget in the agriculture sector as crops to be used in generating foreign exchange.

Ogbeh added: “We cannot survive from continuous importation of these products. Our youths are suffering from unemployment, but the jobs are in the farms and not in the ministries. Our plan is to create millionaire farmers in the country.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

Investment

Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies

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Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

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Economy

Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension

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  • Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension

Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.

OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.

In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.

Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.

Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.

While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.

Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.

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Economy

Gold Dips by 2 Percent on Better Than Expected Job Report

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  • Gold Dips by 2 Percent on Better Than Expected Job Report

Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.

The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.

The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.

“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.

Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.

Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.

The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.

Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.

Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.

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