The Managing Director and Chief Executive Officer, Bank of Agriculture, Prof. Danbala Danju, in an interview with journalists, says rice importation will soon end in Nigeria.
What is the Anchor Rice Borrower programme of the current government all about and how will it impact on the nation’s economy?
The Anchor Rice Borrower programme is aimed at boosting domestic production. The country has been importing rice and because of the foreign exchange and the focus of the new administration to try to convince Nigerians to go into farming, the Central Bank of Nigeria and Bank of Agriculture came up with the Anchor Rice Borrower programme.
In the case of Kebbi State, we have pilot programmes because some of the commercial banks did not consider this as profitable. The Bank of Agriculture is the best place to be because it is a specialist agricultural development bank that is over 42 years old and has more than 137 branches across the 36 states of the federation.
Each farmer has a budget of about N210,000 per hectare disbursement, which is in two forms and largely, they are given inputs like seeds, fertiliser, pumps and about N49,000 as working capital. Then you have to consider labour for land preparation and day to day management of the rice production. Not all the 75,000 farmers we targeted collected the average amount of N210,000 per hectare because some of them had their water pumps or other inputs. But on the average, each of the farmers was targeted to receive N210,000 in estimated cost of cultivation of a hectare of paddy during the dry season. We targeted to have more than 300,000 metric tons of rice being produced over the dry season period. And because of the success of the pilot scheme in Kebbi, the Federal Government has directed that we work closely with the Central Bank of Nigeria to target about 13 states in the programme as well as in wheat production, tomato and other staple crops.
Primarily for now, the focus is on rice to help achieve the current objective of self sufficiency in domestic rice production in about one to two years which President Muhammadu Buhari has promised the country. The Bank of Agriculture is the main implementing agency. We have our workers, who are being spread all over the country, particularly in the 13 states of the federation. We are targeting different heritage farmers to achieve domestic sufficiency in rice and other crops. In a couple of weeks, we are targeting about 300,000 farmers that would be supported under the programme to produce paddy. We are entering into some agreements with off-takers, largely private sector millers, and in some cases, state governments.
You said that the programme is meant for small scale farmers, how do you ensure that the big time farmers do not hijack it?
There is a farmers’ registration. All the farmers had to register with the Bank of Agriculture. We have to collect their biometric and in addition to that, we issued them with BVN so that we can have the identity of the farmers. The target is for the small scale farmers who have an average farmland of one hectare to a maximum of five hectares. This is what we have been doing and this is what we are going to do. There is a private company that is partnering with our bank to properly register and identify the farmers to avoid duplication.
For the large scale famers, we are coming up with a special facility for them under a new arrangement for funding agriculture in our country. They have a different interest structure; it is a different instrument that we are using. Under the programme, we are largely targeting the smallholder farmers. Like I have said, there is a rigorous identification system, which requires farmers to register with our branches, and they need to have BVN before they can be given inputs in terms of seeds, fertilisers as well as working capital. So far, it has been quite successful and that is why we are trying to replicate it in other parts of the country.
How has the programme been received in crises prone areas like the North-East and recently the Niger-Delta?
We did not start at once in all the states of the federation; we started in Kebbi and we learnt from that. We are now strategising on how to target 13 states of the federation with respect to rice. The lessons are very clear from Kebbi; we need robust farmer identification. In the past, people would collect money and then divert it for other purposes; this time round, we are disbursing mainly in kind. We give farmers high quality seeds, pesticides, fertilisers and some kind of training to make sure they adopt the correct agronomic practices in order to have the expected yields.
Traditionally, they used to have one ton of paddy per hectare, but with the new high seeds given to them as well as better agronomic practices, they now could have five tons per hectare, which is an improvement. So they are able to make lots of money. They can now pay us back and we can recycle to reach more farmers.
So, what we have started with is the pilot programme, which is now going to be scaled up in all the states of the federation that have comparative advantage in rice production.
You talked about measures to avoid diversion of funds, but what are you doing to prevent the diversion of produce?
In the past, people would have been given N210,000 per hectare, asked to buy their inputs, do what they want and then come back and pay. Now, under the current programme, we don’t pay farmers directly. Before we give money to farmers, we first have to identify who the farmers are. And once farmers are identified, they register with the bank and there is a committee made up of our representative, farmers’ representatives – the Rice Farmers’ Association of Nigeria, and the off-takers, so that we identify who the farmer is. We have got quality inputs and other seeds company that supply farmers with high quality inputs. So this way, we don’t give money, we give farmers the inputs they need and the inputs are high quality from very quality sources.
The only money we give them is largely about one-fifth of the amount, which is for land clearing, preparation, weeding and transportation. And the money is also given out in instalments; we don’t give all at a go. There are stages; we have the land preparation stage and planting stage. We don’t also give the inputs at once. For instance, fertilisers or pesticides are given at different stages in the production process. So, it is a controlled process.
Do you think this programme is sustainable?
The sustainability of this programme, first of all, is in the module. For a programme to be sustainable, it has to be financially profitable. Farmers in the past had no guaranteed source of credit, now if you’re registered with the Bank of Agriculture, you’ll have the credit to produce your paddy. In the past, they had no guaranteed market, no off-takers. So now that they are registered and they have a ready-made market, the ban on importation of rice makes it very lucrative for them (farmers).
We hope that the Federal Government would sustain the ban on importation of rice because if you open the gate to importation of cheaper and subsidised rice from other economies, it will undermine the profitability of existing rice mills and in turn the profitability of the out growers. So, we hope that the issue of ban on importation of rice would be sustained, and also issues of exchange rate will be handled well. Curiously, an overvalued exchange rate makes it cheaper to import rice, but if we allow for a more realistic pricing of foreign currency or a more appropriate value for the naira, it is good for farmers because instead of importing, they will be encouraged to produce more.
Also, I think there is the question of infrastructure. As we are producing rice currently, the productivity must be enhanced. In this case, more research in terms of output of the seeds. We need high yielding seed varieties of rice and we also need to provide the irrigation, transport infrastructure and the capacity of existing rice mills need to be expanded and new ones established. If we are able to implement all these measures, I think not only will we be able to achieve domestic self-sufficiency but we will also be able to export to other countries in less than two years.
How much are you giving out in the project?
We started during the last dry season, but I can’t give you the total figure. After the pilot scheme in Kebbi, we are now planning to go to the 13 states of the federation and we have a target number of about 300,000 farmers. If you have 300,000 farmers on an average price of about N180,000 per hectares, you can see the amount we are requesting for. We are requesting for huge funds from the Central Bank of Nigeria so that we can support the small scale farmers. We also plan to request for some money from the Central Bank of Nigeria to support large scale farmers. Simply, we are working with different states to identify the target number of farmers in each of the states. And on the basis of this agreement with the Central Bank of Nigeria, we will request for funding. We have been assured by the CBN that once we present the list of farmers with BVN, we’ll be supported with the requisite sum of money.
Is the programme only meant for dry season farming?
No, it is not. Now, we have started with dry season, we’re going into the wet season. For the wet season, in the next couple of weeks, we are targeting 300,000 farmers. After the wet season, we are planning for the dry season. So, it is going to be for both wet and dry seasons.
The Highest Corporation Taxes Around the World and the Main Drivers Behind them
Taxes Pay by Corporation Around the World and the Main Drivers Behind them
While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.
The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.
On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?
OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.
South America has most countries in highest corporation tax top 10
According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.
It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.
Africa: the continent with the highest average corporation tax
Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?
South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?
|Puerto Rico||North America||37.5|
|Sri Lanka||Asia Pacific||28|
|New Zealand||Asia Pacific||28|
|South Korea||Asia Pacific||25|
|United States||North America||21|
|Saudi Arabia||Middle East||20|
|Hong Kong||Asia Pacific||16.5|
Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.
Nigeria’s Crude Oil Production Declined to 1.31mbpd in September
Nigeria’s Crude Oil Output Declined from 1.37mbpd in August to 1.31mbpd in September
The Organisation of the Petroleum Exporting Countries (OPEC) reported that Nigeria’s crude oil production declined by 58,000 barrels per day in the Month of September when compared to the nation’s oil production of August.
In its latest oil market report, the cartel said Nigeria produced 1.37 million barrels per day in the month of August but that number declined by 58,000 to 1.31 million barrels per day in September. Bringing the total decline for the 30 days of september to 1.74 million barrels.
On oil price movement in September, the organisation said prices settled lower in the month under review after four consecutive months of gains.
OPEC Reference Basket declined by 8.1 percent or $3.65 in September to $41.54 per barrel, while it moderated to $40.62 per barrel from the year-to-date.
Commenting on the recent changed in Nigeria’s monetary policy rate, the oil cartel said “the recent cut is a part of the policy to continue supporting the economy that plunged 6.1 per cent in the second quarter hit by the global pandemic.
“Nevertheless, Nigeria’s annual inflation rate surged to the highest rate since March 2018 in August 2020, as it rose to 13.22 per cent year-on-year from 12.82 per in in July.”
Oil prices sustained bullish trend on Thursday after data showed U.S oil inventories declined last week.
Global Economy to Lose $28 Trillion in Five Years -IMF
International Monetary Fund Says Global Economy May Lose $28 Trillion in the Next Five Years to COVID-19
The International Monetary Fund (IMF) has said the world’s economy may lose as much as $28 trillion to COVID-19 in the next five years.
The Fund’s Managing Director, Kristalina Georgieva, disclosed this during her opening remarks at the annual general meeting conference held on Wednesday.
She said “The picture over the last few months has become less dire, yet we continue to project the worst global recession since the great depression.
“Growth is expected to fall to -4.4 per cent this year. And over the next five years, the crisis could cost an estimated $28tn in output losses.
“At the same time, we can see stars shining above us. We see unprecedented efforts in vaccine development and treatment.
“We see extraordinary and coordinated fiscal and monetary measures putting a floor under the world economy. And the world is starting to learn how to live with the virus.
“While there is tremendous uncertainty around our forecast, we project a partial and uneven recovery in 2021, with growth expected at 5.2 per cent.”
“As I said in my curtain raiser speech, all countries now face a “long ascent”—a journey that will be difficult, uneven, uncertain, and prone to setbacks.
“Think of how the virus is resurging in a number of countries.”
She also made recommendations, the managing director explained that an unusual crisis requires an unusual approach and solution.
Georgieva said, “In our Global Policy Agenda, which we are releasing today, we outline the measures we believe are needed to overcome the crisis and build a brighter future. Let me highlight three priorities:
“First—continue with essential measures to protect lives and livelihoods.
“A durable economic recovery is only possible if we beat the pandemic everywhere. Stepping up vital health measures is imperative.
“As is fiscal and monetary support to households and firms. These lifelines—such as credit guarantees and wage subsidies—are likely to remain critical for some time, to ensure economic and financial stability.
“Pull the plug too early, and you risk serious, self-inflicted harm.”
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