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Tag: growth

  • N50b new capital to accelerate growth, says Union Bank

    Union Bank of Nigeria (UBN) Plc anticipates improved performance in its business as it begins to deploy about N50 billion new capital raised recently from its shareholders.

    Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, said the net proceeds from the rights issue, which was oversubscribed by 20 per cent, would accelerate the pace of doing business as the fund will be deployed across identified business areas.

    He said the success of the recent rights issue has once again demonstrated shareholders’ confidence and support for the bank’s short to medium term strategic priorities.

    According to him, the support of the shareholders has been critical to the rebuilding and transformation of Union Bank over the past five years.

    “Having successfully raised the required capital, we will accelerate the pace of doing business in 2018 as we begin to deploy this fresh capital across identified business areas which will increase our capacity to serve customers better while also delivering returns to our investors in the short to medium term,” Emuwa said.

    He added that the new capital will also ensure the bank maintains a strong buffer above regulatory capital adequacy requirements as it drives towards its vision to be Nigeria’s most trusted and reliable banking partner.

    Union Bank’s recent rights issue exceeded its capital raising target by 20.33 per cent as majority core investors and minority shareholders jostled for additional shares and oversubscribed their provisionally allotted shares.

    Union Bank had floated the rights issue to raise N49.745 billion from existing shareholders by offering 12.133 billion ordinary shares of 50 kobo each at N4.10 per share. The rights issue had been pre-allotted on the basis of five new ordinary shares of 50 kobo each for every seven ordinary shares held as at the close of business on Monday August 21, 2017.

    Allotment results approved by the Securities and Exchange Commission (SEC) showed that Union Bank raised N59.87 billion as shareholders submitted 4,313 applications for 14.6 billion ordinary shares. The bank has however decided to retain its target of N49.745 billion and to return the excess monies to shareholders.

    The breakdown of the allotment showed that 98.4 per cent of the shareholders accepted their rights in full with 52.03 per cent also applying for additional shares.

    Emuwa had earlier outlined that the net proceeds of the rights issue to be used as working capital will be deployed to key growth sectors of the economy and Federal Government’s priorities including agriculture, manufacturing, solid minerals, services –health and education, construction and real estate and oil and gas.

  • ‘2017 was year of growth for African start-ups’

    A member of the judging panel evaluating the Southern Africa edition of the Global Start-up Awards (GSA) in 2018, Barbara Mallinson, has said 2017 was a good year for Africa’s start-up ecosystem.

    “It feels like 2017 is when the start-up scene finally grew up in Africa. For years, innovative things have been built and taken to market, but very few of these innovations managed to scale and exit successfully. This year was different. We’ve seen funding and scaling and exits on a level that’s comparable to the States or Europe. Startups that stood out to me include Luno for how they got their timing right. The combination of the perceived risk of holding local currency and the global trend to get into crypto-currencies has resulted in huge growth and a significant Series B for the crypto-currency exchange and wallet. There is also Sweep South and I’m just a fan of their model and can see it working in many different areas,” Mallinson said.

    Mallinson believes despite the usual ongoing challenges faced by African start-ups, greater access to funding and other avenues of support will encourage home-grown entrepreneurs to compete.

    “There’ll still be the usual market access challenges that we’ve come to tolerate over the past few years but on top of this, there’ll also be greater competition from other start-ups. These days, it’s a whole lot easier to start a business, receive operational support and gain access to funding than it was before. And because of this, many more people are choosing to do so.

    “Nearly all of the continent’s most successful start-ups have come from cities such as Jo’burg, Cape Town, Cairo, Nairobi, Accra, Kigali, Kampala and Lagos. It’s not surprising, since each of these cities has an established and flourishing start-up eco-system that plays host to numerous incubators, accelerators, investors and industry events. The next step however, is to scale these opportunities beyond the big cities, where needs are often greater and innovative solutions could make a bigger difference,” Mallison added.

    The Southern Africa edition of the Global Start-up Awards has a total of 13 award categories including best start-up founder, best incubator and best fin-tech start-up of the year.

    Judges will make shortlists from all the online nominations received before a jury scores each of the finalists per category. A public vote will then be conducted and added to the jury’s score.

    Winners will be crowned for each participating country in the region before the regional awards take place in the third quarter of 2018 followed by the global award show.

    Online nominations will open on  March 5, 2018 via the competition’s official website.

    Mckevin Ayaba, Regional Director for GSA-Southern Africa said: “Start-ups from here don’t get to be on the limelight because we don’t always have the people who that they ca make it to the next level. We want to recognise them because technology is shaping the future of the world and we need to encourage start-ups to keep doing this important work.”

  • Booming agric, bumper growth

    Booming agric, bumper growth

    Experts expect the agricultural sector to gain momentum this year, boost incomes, complement the continued fiscal stimulus and an upturn in merchandise exports. This, however, will depend on policy reforms to promote   services liberalisation, and public infrastructure management. DANIEL ESSIET reports.

    To experts, agriculture will yield substantial growth and more revenues this year.

    They  based  their projection on  an enabling environment that would support  economic growth, strong fiscal consolidation, low account deficit, growing foreign direct investment (FDI), low inflation and higher wages in rural areas.

    Above all, they said, these would depend on the Federal Government’s ability to sustain its reform’s momentum.

    Speaking with The Nation, Vice-Chancellor Federal University of Agriculture (FUNAAB), Abeokuta, Prof Felix Kolawole Salako, said the reforms will lead to higher long-run growth.

    He noted that the government efforts to liberalise the agricultural sector and foster a friendly investment climate will help attract investment flows.

    According to him, the Federal Government has put its full weight behind a national strategy designed to make food  production an even larger engine of inclusive economic growth.

    Salako said steps taken by the government to  support sustainable rice production  will improve food security and livelihoods, while also safeguarding natural resources.

    Despite some hiccups, Salako believes that continued reform progress will help the country remain one of most dynamic emerging economies.

    According to him, the Ogun State and the Federal Government have convened a multi-stakeholder effort to refine key elements of the strategy, which includes developing rice varieties with high export value, adopting advanced crop management techniques, and more intensive use of machines and other technologies in rice farming.

    Citing Ogun, Salako said the state is working to help farmers participate in “viable, safe and dignified” entrepreneurial opportunities in the rice value chain.

    Cocoa Association of Nigeria(CAN) Board of Trustees Chairman,  Dr. Victor Iyama,  expects this year to be that of consolidation – with the results of all policy initiatives taken beginning to take shape.

    He said the agricultural sector will remain the biggest  job creator. This is because the sector is significantly improving both in terms of its output and its diversification.

    According to him,  the agricultural sector had been the biggest positive contributor to the growth.

    In 2016, agriculture was recorded as the top performing sector with the growth of 4.54 percent, again repeating its performance of a 4.53 percent  growth in Q2.

    Last year, from 3.4 per cent in Q1 to 3.0 per cent in Q2, the sector grew to 12.5 per cent y/y in nominal terms, compared to 9.8 per cent in Q1’17.

    Iyama, also the Federation of Agricultural Commodity Association of Nigeria(FACAN) President, said more youths would be attracted to agriculture  as there are  initiatives to get them to learn to adapt solutions in their areas of interest, as well as receive hands-on training to bring transformational change to their communities through agriculture.

    National Cashew Association of Nigeria(NCAN) Publicity Secretary, Anga Sotonye, noted that  there would be more emphasis on access to credit and financing. This stems from the awareness that more funds, in terms of both loans and grants, need to be supplied to the sector for it to reach its full potential.

    Sotonye said the economy might be off to a good start this year with improved exports pushing growth prospects.

    According to experts, government interventions are expected to create new opportunities for people in communities and increasing family incomes.

     

    Interventions

    There are many   programmes to fund agriculture. These include the Rice Intervention Fund, a loan programme targeting processing facilities; the Agricultural Credit Support Scheme; the Fund for Agricultural Finance in Nigeria, which works with small and medium-sized enterprises; the Commercial Agriculture Credit Scheme; and the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).

     

    Export expansion grant scheme

    The Nigerian Export Promotion Council (NEPC) has resumed processing baseline data for the reintroduced Export Expansion Grant (EEG) scheme.

    Sotonye expects the Federal Government to re-introduce the EEG scheme this year  to salvage the agro exports sector.

    According to him, the policy will led to an increase in value chain expansion in terms of agro processing which resulted in significant new investments and job creation.

     

    NIRSAL

    The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) was introduced to provide affordable financing to actors in the agricultural value chains. Recently, the CBN initiated a public-private sector initiative with the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development to provide N75billion as loan to farmers under the scheme.

     

    The Commercial Agriculture Credit Scheme (CACS)

    To enhance the Commercial Agriculture Credit Scheme (CACS) as well as mitigate the risks faced by financial institutions in financing the agriculture sector, the Central Bank of Nigeria (CBN) has reviewed the guidelines for the scheme.

    The review affected sections 16 and 17 of the guidelines and introduced significant changes, including a requirement that, henceforth, the Nigeria Agriculture Insurance Corporation (NAIC) should provide insurance for all agricultural facilities/projects under the CACS in line with the NAIC Act.

    In furtherance of the revision, the CBN has directed the commencement of insurance premium payments by borrowers under the CACS scheme.  The CBN has so far released N501.697 billion under CACS. The fund was deployed to boost 526 agriculture projects across the country. Total repayment under the scheme was N251.156 billion for 526 projects, of which 281 projects had been repaid by last September

     

    Anchor Borrowers’ Programme (ABP)

    The  Anchor Borrowers’ Programme (ABP) is the government’s flagship agricultural financing initiative.

    Launched in the last quarter of 2015, the programme offers loans and farm input to smallholder farmers producing key crops  to scale up and commercialise their operations, and connect them with large-scale processors.

    The CBN believes the ABP will have a dramatic impact on the local economy, and has set a target of creating at least one million jobs in the processing segment through the scheme by 2020.

     

    Rice production

    The Executive Director, Risk Management and Finance, Bank of Agriculture (BOA), Prince Niyi Akenzua, said Nigeria has saved over N216 billion from rice import from Thailand and other countries, since the nation’s domestic mass production flooded the markets under the ABP.

    Akenzua disclosed this in Ibadan when he led some officials of the bank on a visit to Oyo State Governor Abiola Ajimobi. He said the figure represented a fraction of a staggering $22 billion (N7.92 trillion) spent on food imports yearly prior to the advent of President Muhammadu Buhari’s administration.

    He said: “The pilot scheme was so successful that $600million was saved from rice importation due to massive rice production in the country.

    “One or two rice millers in Thailand have closed down because Nigeria, which has always been their major importer, has stopped importing their rice.”

    Also  states, such  as  Lagos,  Kebbi, Ogun and Kano, have been in the forefront in rice production.

    Ogun has intensified the production of Ofada rice.

    Governor Ibikunle Amosun said the  state can produce and process about 65, 700 metric tons of Ofada rice yearly, with a strong intention to expand production in no distant time to create more direct and indirect jobs in Ogun state.

    “We are intensifying our contribution to the attainment of the Federal Government efforts in increasing domestic rice production,” ,he said during the commissioning of MITROS Ofada rice in Abeokuta recently.

    The CBN also has formed strategic partnerships with agricultural commodity associations to expand the implementation of ABP.

    Its  Acting Director Corporate Communications Department (CCD), Isaac Okorafor, said the strategic partnership had begun to yield results with the commencement of the Rice Farmers Association of Nigeria (RIFAN) Anchor Borrowers’ Programme with the Bank of Agriculture where about 300,000 rice farmers across 20 States would be supported under the ABP during the upcoming dry season cultivation.

    The ABP has, so far, achieved success in terms of outreach and coverage, making it one of the most successful CBN development finance interventions to date. About N45.5 billion has been released through 13 Participating Financial Institutions for over 218,000 farmers cultivating nine commodities across 30 states.

    Information Minister, Lai Mohammed, said Nigeria will attain self-sufficiency in rice production  this year. According to him, Nigeria is inching closer to self-sufficiency in rice production due to the successes in the local production.

    Muhammed cited a report by a Thai rice export association to support his claim.”In fact, the Thailand Rice Exporters Association revealed that within just two years – from September 2015 to last September, Nigeria’s rice import dropped from 644,131 Metric tonnes to just about 21,000MT.

    “There is more good news to report: The increased rice production has, in turn, led to the establishment of rice mills, including the 120,000MT WACOT Mill in Kebbi and the 1,000,000MT Dangote Rice Mill,” Mohammed said.

    Mohammed added that Nigeria targets the production of seven million metric tonnes of rice  this year

     

    Thailand to establish rice milling plants

    Mohammed said: “Thailand have shown interest in establishing rice milling plants in Nigeria, and this is sure to further boost rice production.’’

     

    Challenges

    According to experts, agriculture has continued to face several impediments in the form of lower capacity, regulatory and policy challenges and corporate debt overhang. However, the push to increase infrastructure spending and to accelerate structural reforms will eventually drive a sustained rebound of private investments. However, credit growth, particularly to industry remains weak.

    NIRSAL Managing Director, Mr Aliyu Abdulhameed has lamented that Nigeria lacks the full capital to actualise its potentials in agriculture.

    At the first yearly NACCIMA-NIRSAL Agribusiness and Policy Linkage Conference with the theme: Implementing the agriculture component of the Economic Recovery Growth Plan (ERGP) in Abuja, Abdulhameed noted that this development  threatens the ERGP, which aims at increasing yeraly agricultural growth from 2011-2015 output of 4.1 per cent to 8.3 per cent by December 2020.

    According to him, “We are naturally endowed with land, water, climate and the market and at very competitive levels, but we lack the full capital to actualise these opportunities. To leap frog the development as desired by the agricultural sector, fully identified actors have to be attracted into Nigeria.”

    He said though the country lacked the funds for infrastructure, logistics, storage and processing, NIRSAL was established to share all  funding risks across the value chain.

     

    Poor input

    Experts say except the government does something, farmers will still face the challenge of poor input that will result in declining yields across key crops. They say  yield growth can only be  achieved by increasing input, and by improving input productivity through the use of technology.

    Farmers recorded low yield of most key crops, including cassava, cocoa beans and palm fruits, a reflection of low utilisation of improved seedlings, agrochemicals and poor adoption of technology.

     

    Infrastructure challenges

    Food transporters said with bad roads, which compound their problem, they lose lives and goods worth between N250 million and N300million weekly, which consequently affects prices of food items in the market. They said most of the roads connecting farm gates to cities are in bad shape, stressing that unless the government starts massive rehabilitation, the prices of food will continue to soar. The food transporters explained: “If roads are fixed and made motorable, prices of food would come down and that would also reduce post-harvest losses and waste because a lot of food items perish at the farm gates due to this problem.

    “For instance, the Jebba Bridge has been damaged due to lack of maintenance and rehabilitation and trucks cannot ply the road from the North to Lagos, and they have to go through the Abuja-Lokoja Road to Lagos, which is also in a deplorable condition and this has further made food dealers and vendors to record high losses of goods and lives. Even the road from Niger to Oyo is impassable and is in terrible condition.”

     

    Prospects

    According to global research and consultancy firm, Oxford Business Group (OBG),  despite any adverse developments in the country, it remains a key investment destination in Africa.

    Speaking during the launch of its new report titled: “The Report: Nigeria 2017”, OBG Editor-in-Chief, Mr. Oliver Cornock, stated: “Nigeria remains an appealing destination for investors and the fact that growth has begun to pick up following a slower period for the economy will provide the country with a welcome boost, as its efforts to develop and diversify the economy gains pace.”

    He saids the report explored moves to boost industrialisation and diversification, to steer the country towards economic revival. The report further explored some areas of the economy that have remained resilient in difficult times, such as agriculture, which has become a major employer and is benefiting from the relaxing of lending constraints. The report also examined the key part that a regulatory overhaul should play in helping to tackle the challenges that the sectors face ahead of the implementation of new infrastructure programme, while analysing the government’s far-reaching plans to modernise the country’s long-neglected public transport system. It considered both the opportunities that the project pipeline will signal for investors and the difficulties in bringing the private sector on board for ventures.

     

    N118.98b budgetary allocation to agric

    As part of its commitment to diversify the economy, the Federal Government has proposed N118.98billion as budgetary allocation to the agricultural sector this year.

    This amount, however, is an improvement on the N103.79 billion allotted to the sector in 2017 budget.

    Meanwhile, analysts said to achieve economic diversification, with a large land mass of 923,768 km² and many Nigerians venturing into farming, it is essential that the government  revisits its commitment made 15 years ago in the Maputo Declaration, a pledge by African heads of state and government to allocate 10 per cent of their national budgets to the agric sector as part of the Comprehensive Africa Agriculture Development Programme (CAADP).

     

    CBN offers five per cent interest rate  on agro equipment

    The CBN considers the next phase of the credit scheme, which will centre on cheap funding for importers and fabricators of agro-allied machines.

    At the launch of local Ofada Rice tagged, ‘MITROS Rice’ produced by the Ogun State government, CBN Governor Godwin Emefiele, declared: “We are going to be looking at providing cheap funding at no more than five per cent  for those who are going to be assessing facilities to acquire agric equipment like threshers, like harvesters, or those who will be going to fish farming, or those who will be going into feed mills. Be rest assured that if you identify yourself, you will be counted and we will support you.”

    Emefiele declared that the next phase of credit scheme by the apex bank would be a graduation from small holder farmers to the importers and fabricators of agro-allied machines.

  • ‘Policies will determine socioeconomic growth’

    ‘Policies will determine socioeconomic growth’

    As 2017 grinds to a halt,Nigerians from all walks of life have expressed mixed feelings about their outlook for the forthcoming year. While some have expressed blessed assurance of hope and confidence, many have argued that nothing dramatic will happen judging by the several missteps of the past 12 months. Ibrahim Apekhade Yusuf reports

    As we draw the curtains on 2017, the view of most Nigerians is that the year had its fair share of turbulence and troubles, which admittedly left nothing to cheer about.

    One thing most people remember is that it was a year recession went full circle, such that not a few players operating in the major commanding heights of the economy would disagree that things were not smooth. From banking, telecoms, service sector, manufacturing, to mention just a few, all tasted the bitter pills of the biting economic crunch.

    Despite the hiccups of the past 12 months, people already hope to see things differently in key sectors of the economy next year just as a few others would rather want to err on the side of caution.

    IMF projection

    In the view of the International Monetary Fund, IMF, Nigeria’s economy will grow at a faster pace than South Africa’s in 2018.

    According to its World Economic Outlook, WEO, for July 2017, the IMF said Nigeria will grow at 1.9 per cent in 2018, while South Africa will only climb by 1.2 per cent.

    In 2016, the Nigerian economy contracted by 1.6 per cent, while South Africa expanded by 0.3 per cent. Projections for 2017 put South Africa’s growth at one per cent, while Nigeria is expected to muster just 0.8 percent.

    The Breton Woods institution, which held global growth projections at 3.5 per cent in 2017 and 3.6 per cent in 2018, said growth was marked down in South Africa due to elevated political uncertainty.

    “In sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capita terms this year for the region as a whole—and would remain negative for about a third of the countries in the region,” the IMF said via WEO.

    Experts’ view

    Also speaking with a cross-section of Nigerians, a few of the respondents buoyed by patriotic fervour want to see things work differently in the coming year as such readily offered useful suggestions as to how to turn things around just as others urge cautious optimism.

    Firing the first salvo, Victor Ndukauba, an economic and financial analyst said there is a lot of uncertainty around the coming year. At best, he said the economy will not be bullish in 2018.

    According to Ndukauba, the assurance by the apex bank chief, Godwin Emefiele that interest rate will be at single digit in 2018 for instance, is just mere wishful thinking.

    As far as he is concerned, there is nothing to show that the managers of the economy will get things right this time around if the observable trends of the outgoing year is anything to go by.

    Ndukauba who also doubles as Deputy Managing Director of Afrinvest Limited said: “I don’t see the CBN been able to achieve single digit interest rate for the simple fact that a lot is still wrong with the fundamentals.”It’s an election year no doubt, there will be a lot of liquidity in the system to try to do a few things just to sway votes but other than that, nothing much will give.”

    In his assessment of the outgoing year, Dr. Uche Uwaleke, Associate Professor of Finance and the Head of Banking & Finance department at Nasarawa State University Keffi, said judging by official figures, the outgoing year recorded a number of improvements on the economic front over the previous year, thanks to recovering crude oil prices and higher oil production.

    He was however quick to admit that it was not all cheering news in 2017. Specifically, he said the low growth environment and exposure to the oil and gas sector, the banking industry’s solvency ratios declined from about 15 percent to 10.5 percent between December 2016 and October 2017 just as non-performing loans in the banking sector rose to 15 percent as of October 2017 well ahead of the CBN’s regulatory threshold of 5 percent.

    According to the Chartered Banker, Stockbroker and Fellow of ICAN, economic performance in 2018 will be a marginal improvement over 2017 because government revenues are still highly dependent on the oil sector; it is a no brainer, that the performance of the economy in the new year will be powered by the outcomes in the international crude oil market.

    The first quarter of 2018, he projected, will be a good time for risk-taking investors to take positions in undervalued stocks. Overall, economic activities will progress at snail pace in the first quarter of 2018 with higher unemployment rate than the previous quarter, a little shy of 20 percent. Real GDP growth rate, year on year, will likely hit the two percent mark but it will be more from base effect than actual expansion in economic activities considering that the economy was still in recession during the corresponding period of the preceding year.

    “The economy will be at cruising point during the second and third quarters of 2018. Much of the expansion in economic activities will occur during this period. The IMF has forecast a real GDP growth rate of 2.1 percent for Nigeria while the federal government’s target is 3.5 percent as contained in the 2018 budget. Real GDP growth for 2018 will lie somewhere in-between. Improvements in security and oil infrastructure will likely boost oil production up to the level (2.3 million barrels per day) envisaged in the 2018 budget. Healthy external reserves, sufficient to finance over seven months of imports, will support a stable exchange rate and convergence of rates across all the segments of the forex market.”

    Echoing similar sentiments, a leading economist and financial derivatives analyst, Bismarck Rewane, in his outlook for 2018, lamented that the federal government is not courageous enough to increase its spending in the 2018 budget proposal.

    However, when inflation is factored in, there has been no real increase in total expenditure, according to Mr. Rewane.

    He said this during an appearance on a television magazine programme monitored in Lagos recently.

    “The figure of N8.6 trillion is 15.7 percent higher than the budgeted figure for last year. The rate of inflation this year is 15.9 percent. So, in real terms, there has been zero growth in expenditure.”

    For Rewane, when the parameters of the budget and the realities of the Nigerian economy are taken into consideration, it is clear that this is a time for economic stimulus, a time to increase spending and to be audacious.

  • Chamber optimistic of business growth in 2018

    Chamber optimistic of business growth in 2018

    The Nigerian-American Chamber of Commerce (NACC) has expressed optimism that the business environment for the 2018 would be more promising compared to the outgoing year.

    Giving this assurance at the weekend was the National President of NACC, Olabintan Famutimi. He spoke during the annual dinner dance of the Chamber in Lagos.

    Earlier, the Chamber boss had reassured Nigeria would not miss out again on the African Growth and Opportunity Act (AGOA), a legislation he said would enhance market access to the United States for qualifying sub-Saharan African (SSA) countries.

    “We have done a lot of training, workshops, sensitisations, we have participated in international foray and we have worked effectively with the United States Aid for International Development (USAID) as we signed, we set up the centre and put a manager under desk and part of the money to set up that desk was provided by the USAID, we are moving and we are showing results already.”

    The Chamber, Famutimi noted, had contributed to the government policy in the Executive Order.

    Specifically, he said the Chamber had achieved among other things the breakfast meetings on ease of doing business, activities of the AGOA programme which according to him has become the focus of driving business in the country and setting up AGOA at the secretariat, and the small and medium enterprises financing conference in partnership with the American Embassy.

    According to him, the Chamber creates value for members continuously and facilitates business-to-business relationships adding the services offered to members include the organisation of trade missions into the two countries, sponsorship of trainings, conferences and seminars addressed by leading authorities in different fields, affording members and non-members a platform for the discussion of topical issues affecting the economy in general.

    He assured that the Chamber would continue to promote the development of trade, commerce, investment and industrial technological relationships between the public and private sectors of the country and the United States. It would also encourage relationships with other Chambers of Commerce in Nigeria and the US as well as promote the establishment of chapters of the chamber throughout Nigeria among others

  • Developing countries to lead oil demand growth till 2040, says OPEC

    Developing countries to lead oil demand growth till 2040, says OPEC

    The Organisation of Petroleum Exporting Countries (OPEC) has said developing countries will lead oil demand growth in the next two decades.

    In its 2017 World Oil Outlook launched in Vienna, the cartel said oil demand is expected to grow in the developing countries, especially Asian and the Middle East countries by almost 24 million barrels per day (bpd), to reach 67 million bpd by 2040.

    The report said:“Total primary energy demand is set to increase by 35 per cent in the period to 2040 and oil is expected to remain the fuel with the largest share in the energy mix throughout the forecast period to 2040.

    “Long-term oil demand has been revised upward by 1.7 million barrels per day compared to the World Oil Outlook  of 2016, with total demand at over 111 million barrels per day by 2040. There is no expectation for peak oil demand over the forecast period to 2040.

    “Developing countries will continue to lead demand growth, increasing by almost 24 million bpd to reach 67 million bpd by 2040. The long-term demand growth comes mainly from the transportation sector – road transportation (5.4 million bpd), petrochemicals (3.9 million bpd) and aviation (2.9 million bpd)”.

    According to the report, oil demand in the road transportation sector is driven by the increasing car fleet in developing countries and declining oil use per vehicle in the Organisation for Economic Cooperation and Development (OECD) countries. The car fleet is anticipated to change smoothly over the forecast period. In the passenger car segment, electric vehicles are estimated to represent 12 per cent of the car fleet by 2040.

    It said: “Non-OPEC liquids supply is forecast to increase from 57 million bpd in 2016 to 62 million bpd in 2022, but in the long-term non-OPEC liquids output is anticipated to see a decline, dropping to 60.4 million bpd by 2040, with United States (US) tight oil estimated to peak just after 2025;

    “The demand for OPEC crude is anticipated to expand to  41.4 million bpd by 2040. The share of OPEC liquids in total global liquids supply is estimated to increase to 46 per cent by 2040, from 40 per cent in 2016.

    “Around half of the estimated refining capacity additions are expected in the Asia-Pacific, which is projected to add 9.5 million bpd by 2040. Capacity rationalisation remains a long-term requirement, with some 6-8 million bpd of closures indicated as needed by 2040 if refining regions are to maintain utilisation rates of at least 80 per cent.

    “Global crude movements are expected to increase by around 6.5 million bpd between 2016 and 2040, mostly supported by Asia-Pacific imports and Middle East exports. In the period to 2040, the required global oil sector investment is estimated at $10.5 trillion”.

    Speaking during the launch, Director, Research Division of OPEC, Dr. Ayed S. Al-Qahtani, said: “The multi-faceted nature of the oil industry and the continued interdependence of all nations; the impact of the ongoing market rebalancing process, specifically on the medium-term outlook; that oil will remain a fuel of choice for the foreseeable future; that security of supply and security of demand are very much two sides of the same coin; and the importance of exploring and evaluating the possible challenges, uncertainties, as well as opportunities, the industry might face.”

  • Osun APC hails state’s growth

    Osun APC hails state’s growth

    The All Progressives Congress (APC) in Osun State has hailed the economic and human growth of Rauf Aregbesola’s administration in the last seven years.

    Describing Aregbesola as unstoppable, the party advised Osun residents to show determination in sustaining the tempo of growth.

    In a statement yesterday by its spokesperson, Kunle Oyatomi, the party said Osun had come a long way in engineering change from a “poverty-stricken and backward community to a significantly developing society of hard-working and progressive-minded people”.

    The party advised the people to improve their lives, adding that as “citizens of this state, we must not allow those who are backward-looking and selfish, especially political vultures, negatively disposed to progress, to mislead them into being careless about keeping pace with the developments and progress thus far achieved in Osun”.

    The APC, which called for vigilance, noted that “to understand the magnitude of what has happened in Osun under the leadership of Aregbesola, the people have to take a serious look at what this state was some eight years ago, to appreciate what it is now.

  • ‘Govt needs to address harmful regulations to enhance growth’

    ‘Govt needs to address harmful regulations to enhance growth’

    Mr. Antti Ritvonen is the Country Manager, Dizengoff Nigeria, a member of the United Kingdom (UK)-owned Balton CP Group. Dizengoff is one of the leading communication and agriculture companies in Nigeria, providing customers with the best innovative solutions in irrigation, greenhouses, tractor & implements, Agro-consumables, cyber-security, radio–communication, home land security, IT infrastructure and turnkey projects. Ritvonen, in this interview with DANIEL ESSIET, shares his opinion on several issues.

    With the economy technically out of recession, do you still see prospects for growth?

    I will speak from two perspectives. First, the environment is still tough for businesses to operate. I also think we are undergoing some massive growing pains at the moment, too.

    Operators have to work hard to achieve their goals. On the other hand, I see positive signs, especially with greater attention given to agriculture. That means a big opportunity for our agric business division. I think the government will likely get past these growing pains by focusing more on agriculture.

    Last year, regulation, skills, national debt, and taxes topped CEOs’ list of threats to business growth. None of these have been addressed this year. Do you still see over-regulation as a concern?

    At a sector level, there are a lot of regulations that are meant to guarantee food and human safety. This, not withstanding, I think it is wise to examine the possible effects of actions and the negative impact of over regulation on the market and the economy. The government needs to address harmful regulation in order to unleash economic growth.

    I am not saying there should be no regulation; I will appreciate a clearly definable reduction in the regulatory burden for the industry. For instance, agro chemicals are critical to improving food production.  As you know, agrochemicals and other crop protection products play a crucial role in increasing agricultural productivity. To meet the food requirements of the nation, agricultural productivity and its growth need to be further improved. This can be achieved, using agrochemicals to provide pre and post-harvest protection to crops and agricultural output.

    Activists are campaigning against increasing use of agro chemicals and pesticides by farmers because of long-term health and environmental effects. What is your view on this?

    I support regulations on pesticide with an aim to better protect human health and the environment, and to make agriculture more sustainable. There are a lot of fake agro chemicals. I support regulations to stop such manufacturers from operating in other to save human lives and protect the business of farmers.

    I support the government efforts to control the spread of hazardous chemicals, but there are reputable organisations such as ours that are determined to produce and supply quality agrochemicals to farmers, especially safe and effective pesticides. We are capable of advising governments on technical issues relating to manufacture, use and safety issues relating to pesticides.

    How favourable is the tax regime to your industry?

    I  think the government needs to exempt  thee industries from  a lot of taxes  that will affect inputs used in the farm such as seeds, fertilisers, pesticides, tractors etc. as it will contribute to increase in prices of farm output. Farm output prices are controlled by market forces and the farmer has little control. As the input price rises and output price remains stagnant, the farmer will have no option, but to absorb the cost, thus increasing his burden.

    With the economy under stress, farmers and agro businesses will be reeling under tremendous pressure from many ends and the increased burden of taxes will create a crater in their incomes. If somehow, the output prices increase, the nation will suffer as the food prices will go up, thus creating trouble for the common man. The way out will be for the government to exempt the industry from heavy taxation. This will have a positive impact across all agricultural inputs and reduce the encumbrance on farmers.

    What can the government do to enable agriculture play its role in the overall economic development of the country?

    The sector needs an enabling environment where farmers can  access affordable  credit. The absence of production loans is the biggest hurdle.  I believe agriculture is an important part of the economic future of Nigeria. There is enough evidence to show that agriculture can play a role in modernising economy. Much of economic development in Nigeria is going to be based on industrialising agriculture, introducing land reform and developing the manufacturing industry.

    Looking at the growth of Nigeria ’s real GDP per capita over the last 10 years, agriculture contribution to  GDP has been  low. Generally, the process of economic transformation is characterised by a decline in the agricultural GDP share in employment over time, as labour moves to higher productivity sectors.   While agriculture’s share in GDP has been declining in the last 10years, unfortunately also, labour and other resources that can boost industrialisation were absorbed into other more productive sectors. Some of the challenges that the agricultural sector has faced has been land, policy inconsistency. The level of domestic investment is an issue. Foreign Direct Investment (FDI) follows domestic investment; it does not lead domestic investment. The problem with Nigeria’s agriculture is that domestic investment has been too low, it is beginning  to pick and some silver lining coming from the current Foreign Direct Investment.

    I believe that the process of economic transformation is going to be driven by income growth, changes in demand and consumption patterns, technical change and increased productivity.

    What we are doing to support the government is to pursue a strategy focused on increased land productivity, accelerating agricultural growth for job creation with high value activities  across the value chain that  can raise incomes, employment and export opportunities. With the devaluation of the Naira seen by many as an opportunity for exports, cash crops and vegetables now comprise the largest exports in the sector.

    I believe the agric sector, is going to enjoy a period of strong success, but this will depend to a large extent on the implementation of  green alternative policy.

    How concerned are you with the policy, social and business threats to your organisation’s growth prospects?

    Government policies have big role to play in creating an enabling environment for foreign direct investment. Foreign companies are interested in investing under a favourable policy regime and robust business environment has ensured that foreign capital keeps flowing into the country.  I will suggest that the government does more to improve the ease of doing business in the country. Nigeria should be seen and felt as the most attractive emerging market for global businesses.

    FDI is often constrained by unfriendly regulations coupled with a generally unfriendly investment climate.  FDI is critical to enable Nigeria achieve food self-sufficiency.

    We are ready to work with the government to boost productivity by improving farm management practices.  To achieve this goal, we need to work within an environment where policies and regulations foster growth in the agriculture and food sectors, well-functioning markets, and where thriving agribusinesses will be supported to make more food available in rural and urban spaces.  I support regulations that ensure the safety and quality of agricultural goods and services without being costly or burdensome to the extent of discouraging individuals and organisations from investing in the sector.

     What types of technologies are you promoting to attain higher levels of productivity?

    We are doing a lot of things aimed at imparting new technologies or farmers to improve productivity.

    From drip irrigation to agro chemicals, quality inputs, we are promoting technologies and smart solutions for better agriculture. Our drip irrigation solutions are rapidly spreading nationwide.  Farmers  who  have  adopted our  technologies with improved  farming skills saw their production increased in many folds.

    Our experts regularly visit farmers and organise training sessions for them to increase their crop yields while using the appropriate  fertilizers and water optimally. We teach them ways to produce quality vegetables. We have demonstrated diverse technologies to the farmers. They can choose the technology that suits them best and maximise their yield and profits.

    We are providing tailor-made farm solutions to help producers grow vegetables.

    We educate farmers on when to plant, irrigate and harvest; and how to cope with drought; how to choose the crops best for their areas. The major production challenges faced by farmers include low yields, inadequate knowledge of improved varieties, limited skills and knowledge of recommended production technologies.

    When we sell our irrigation tools, we offer training to help benefitting farmers increase farm yields through the use of both improved varieties and accompanying crop management practices.

    Our greenhouse training, for instance, is a practical one.  In combination with discipline and determination, farmers exposed to new agricultural practices from our training can increase output from even one hectare. Our extension agents are trained on technologies to help farmers improve their yields.

    We are determined to empower smallholder farmers with the tools to meet the challenges ahead.

    They are also adopting more efficient water-management technologies, such as advanced drip irrigation.

    What is your approach to youth entrepreneurship?

    The future of Nigeria’s food security must rest with next generation of new young farmers.

    Our mission is to liberate the small scale subsistence farmer by providing a proven approach to become an agroprenuer, with a middle class income on a permanent sustainable basis, as well as bring fresh fruit and vegetables to the surrounding communities at affordable prices.

    We are determined to work with the government to support youths to increase crop yields, on a per hectare basis, by up to 75 times in gross weight harvested.  We want  to eliminate the current scandalous 60 per cent waste of the meagre quantities historically grown in the old fashioned ways, turned rotten by poor packing and long arduous transportation from the rural fields to the urban cities across the country.  We want to help youths produce quality produce at stable affordable prices across Nigeria. With the technologies we have acquired and working  through groups, we see big opportunities opening for young people and  the SMEs  to use technologies to produce food within limited  space to ordinary Nigerians.

    What is your partnership with Best  Foods Fresh  Farms Limited.

    We have  gone into partnership with Apel Capital and Best Foods Fresh Farms Ltd has gone for the establishment of an investment fund for modern greenhouse farming for investors in Lagos. As part of the project, Dizengoff delivers to Best Foods Farms Ltd 10 units of greenhouses to setup a demo/model farm at Igbodu in Epe, where it  already has a farm. Apel Capital will act as trustee for this investment fund. The Fund aims to achieve 35 per cent  return for investors, who are investing into this fund. The minimum investment required is N500,000.

    We are the  technical partner for the project and we will provide technical support on the project from installation, to training, to cultivation etc. We  will also provide trained agronomists to the farm and to greenhouses bought by the investment fund.

    We believe it is not enough to provide products alone, through our combined technical know-how, with do-how and quality inputs, we will perform consistently, day in and day out”. The partnership has different parties Best Foods Fresh Farm Limited – will play the role of the Fund Manager, while Apel Capital & Trust Limited will serve as the Trustee and Dizengoff Nigeria will operate as the Technical Partner in terms of production.

    What would you like people to understand about Dizengoff?

    We want to be reckoned with  as a private organisation that is providing  farmers with improved seeds that will yield more than 200 per cent  in comparison to the farmers’ varieties.

    For instance, we provide a  gravity-fed Family Drip System (FDS)  that can irrigate a crop throughout its entire cycle over a land area of up to 10,000m2. The vegetables cultivated under it with good crop management practices produce over 300 per cent more yields, than the rain-fed vegetables.

    Let me restate that mechanisation of crop production is the only sustainable means of reducing poverty among farmers. We are encouraging both corporate and individual farmers to use tractors; drip irrigation systems and greenhouses for fruits and vegetable production. Sustainable vegetable and crop production had been made easier with the use of modern and affordable farm equipment, kits and improved varieties of seeds. With greenhouse kits, a famer can  produce exotic tomatoes all-year-round even in the bacteria and wilt-infested areas. You can use green house  and plant tomatoes, cucumber, watermelon, potatoes, groundnuts, different vegetables profitably.

    Greenhouse limits the devastating effects of insects pests and diseases that ravage vegetables including tomatoes. With little amount of land space and water, you can  get a yield far higher than your traditional open field product

  • Making agriculture mainstay of economic growth

    Making agriculture mainstay of economic growth

    Agriculture was the mainstay of Nigeria’s economy before the discovery of crude oil. From 1960 to 1969, the sector accounted for an average of 57 per cent of the Gross Domestic Product (GDP) and generated 64.5 per cent of export earnings. To sustain contributions of the agricultural sector to the GDP, the Central Bank of Nigeria (CBN) amended the Commercial Agriculture Credit Scheme (CACS) and encouraged more commercial banks to lend to farmers at a single digit interest rate but insisted that no loan under the scheme should exceed N2 billion, writes COLLINS NWEZE.

    Agriculture was the mainstay of Nigeria’s economy before the discovery of crude oil. From 1960 to 1969, the sector accounted for an average of 57 per cent of the Gross Domestic Product (GDP) and generated 64.5 per cent of export earnings.

    From 1970 to late 2000s, the sector’s contribution to the GDP and export earnings steadily declined because Nigeria’s focus shifted to petroleum exploration. Over the past five years, the sector has contributed an average of 23.5 per cent to GDP and generated 5.1 per cent of export earnings.

    The recent fall in crude oil prices has triggered conversations around the role of agriculture in economic diversification. The agricultural sector requires massive investments to increase production and to create value addition across the most-profitable segments of the value chain.

    Despite the challenges faced in the sector, there has been improved lending to the agriculture.  For instance, before now, no lender would give depositors’ funds to a farmer. Such loans would be considered lost from the date of approval. But today, the lenders have begun to scramble for agric businesses, having seen the potential, and knowing how much a well-priced loan can add to their profitability, many lenders are keying into the agriculture financing scheme.

    To make this happen, the Central Bank of Nigeria (CBN) has amended the Commercial Agriculture Credit Scheme (CACS) following which it pegged maximum loan intake for any project under the scheme at N2 billion.

    It equally pegged the maximum interest rate to the borrower under the scheme at nine per cent, inclusive of all charges.

    The apex bank also approved the participation of deposit money banks in the scheme, with the participating banks required to sponsor projects from any of the target areas in the guidelines, and bear all the credit risk of the loans they will be granting.

    The CACS is being financed from the proceeds of the N200 billion, three-year  bond raised  by  the  Debt  Management  Office  (DMO).  The fund will be  made  available  to  participating  bank(s), to  finance  commercial agricultural enterprises.

    “The single obligor for any project from a participating bank under the Scheme shall be N2 billion while for state governments shall be N1 billion. However, for special schemes and programmes for agricultural development, state governments may be granted concessionary approval for more than N1 billion,” said the CBN.

    The scheme is also expected to help  fast-track  development  of  the  agricultural  sector  of  through the credit  facilities; enhance  national  food  security  by  increasing  food supply  and effecting  lower  agricultural  produce  and  product  prices,  thereby promoting low food inflation.

    The  CBN Governor Godwin Emefiele said agric financing is the way forward for the economy. He explained that part  of  its  developmental  role, the CBN has in collaboration with the Federal Government of Nigeria, represented by the Federal    Ministry    of    Agriculture    and    Rural    Development    (FMARD) established  the  Commercial  Agriculture  Credit  Scheme for  promoting commercial agricultural enterprises in  Nigeria, which is a sub–component of    the    Federal    Government    of    Nigeria    Commercial    Agriculture Development  Programme  (CADP).

    The fund, he added, will complement  other special initiatives of the CBN in providing concessionary funding for agriculture such as the Agricultural Credit Guarantee Scheme (ACGS)   which   is   mostly   for   small   scale   farmers,   Interest   Draw-back scheme,    Agricultural    Credit    Support    Scheme    and    other    similar developmental initiatives.

    Emefiele said there was no need to allocate scarce forex to rice importers when vast amounts of paddy rice of comparable quality produced by poor hardworking local farmers across the rice belts of Nigeria are wasted, and farmers are falling deeper into poverty while we export their jobs and income to rice producing countries abroad? Few decades ago, Nigeria was one of the world’s largest producers of palm oil but today we import nearly 600,000 Metric Tonnes while Indonesia and Malaysia combine to export over 90 per cent of global demand. Under these circumstances, I believe it is appropriate, and in fact, expected, that the CBN contributes to protecting the jobs and incomes of local farmers, using some of the same principles Western Economies use to justify the protection of their farmers through huge subsidies.

    He said that agriculture remains the largest employer of labour in Nigeria and contributes about 24.2 per cent of our GDP. In addition, a good share of the demand for forex today go directly to importing agricultural produce. So, the CBN has both a direct and indirect rationale to ensure that this sector is revived in a significant way. In this regard, we are gratified that the CBN’s Anchor Borrowers’ Programme, together with other initiatives like the Commercial Agriculture Credit Scheme and NIRSAL, are proving to be successful in several states.

    He explained that in Kebbi State alone, over 78,000 smallholder farmers are now cultivating about 100,000 hectares of rice farms. It is expected that over one million metric tonnes of rice will be produced in that State alone this year.

    And this is the bedrock of the recently-launched Lake rice, which is an innovative partnership between the Governments of Lagos and Kebbi States. The CBN remains committed to do more in the identified crops such as rice, maize, sorghum, tomatoes, cassava, cocoa, cotton, dairy, and groundnut.

    “We also need to find ways to make land titling much easier especially for smallholder farmers. In this regard, the Nigeria Incentive-based Risk Sharing System for Agricultural lending (NIRSAL) can assist with technical knowledge and deployment of relevant GIS and Satellite imaging that will realize this within a short period of time,” he said.

    Emefiele said at a workshop on innovative agricultural insurance products, in Lagos that the agricultural sector provides up to 70 per cent of employment in Nigeria and accounts for about 42 per cent of the country’s Gross Domestic Product (GDP).

    Emefiele said the large import food products include wheat, rice, flour, fish, tomato paste, textile and sugar.

    “We are confronted, as a nation with a wide range of development challenges especially with the dwindling global crude oil prices and the nation’s dependence on it as its major source of revenue. There is the need to diversify the mono-cultural tendencies of the economy by developing other sectors of the economy especially agriculture,” he said.

    He said that Nigeria’s formal financial system is lending about four per cent of all formal credit to the agricultural sector compared to three years ago when only about one per cent of all credit went to agriculture. He insisted that lending is still low given the lingering perception by banks that agriculture is highly risky.

    Emefiele said development and expansion of the agricultural insurance sub-sector will go a long way in mitigating against natural disasters and eventually encouraging banks to lend to agriculture.

     

    Bankers’ Committee

    The CBN and deposit money banks, under the aegis of the Bankers’ Committee also restated its commitment to expanding bank lending in agro-business in order to discourage importation of goods can be produced locally.

    The bankers also stated their resolve to explore large corporates as anchors to lend to participants across the value chain to improve the capacity of Nigeria’s agro-businesses so as to create sustainable jobs and inclusive growth.

    The bankers also affirmed their commitment to financial deepening of the economy, improving financial access to key sectors of the economy, innovative solutions for the critical finance of generation, provide finance for small and medium enterprises, among others.

    “We note that four basic commodities that are consumed by Nigerians – rice, wheat, fish and sugar jointly account for a significant amount of the country’s annual import bill. We are convinced that the nation has the capacity to produce these consumables in required amounts to meet our domestic consumption needs. With its attendant impact on Gross Domestic Product (GDP) and job creation, agriculture remains a critical focus sector of the financial system,” it added.

     

    CBN’s roles

    The CBN set the tone when it introduced Nigerian Incentive-Based Risk Sharing Agricultural Lending (NIRSAL) to the banks. By that single policy, banks can lend to agricultural sector and its value chains without fear of losing such funds. The NIRSAL is already being implemented by the banks and is expected to drive agricultural revolution in the country.

    The CBN explained that NIRSAL, unlike previous schemes which encouraged banks to lend without clear strategy to the entire spectrum of the agricultural value chain, emphasises lending to the value chain and to all sizes of producers.

    The Federal Government also plans to double agriculture’s share of banks’ credit to 10 per cent in two years. Also, the Federal Government has made a fundamental shift that agriculture is not a developmental activity, but a business. “The CBN has shifted the mind-set of the banks. It’s a new agriculture sector in which they can actually invest money and make money,” the bank said.

     

    Agric potential

    Already, banks and the CBN are discussing how to increase lending to the sector. For the apex bank, government needs to pay more attention to agriculture, which still has one of the greatest potentials in growing the economy.

    The CBN said that one way of achieving this, is by collaborating with the banking system to fix the value-chain problems in the agricultural sector. She said economic development was about enhancing the productive capacity of an economy by using available resources to reduce risks, remove impediments, which otherwise could hinder investment.

     

    NIRSAL performance

    According to the CBN, NIRSAL is also expected to be a catalyst for innovative risk management strategies, long-term financing for agribusiness and significant job creation by new entrepreneurs.

    “The mandate of NIRSAL is to act as the custodian of all credit guarantee schemes, interest draw back schemes, and commercialisation initiatives related to an integrated value chain approach to agriculture and agribusiness in Nigeria,” the CBN said. Under NIRSAL, there are five pillars to be addressed by an estimated $500 million that will be invested by the CBN, according to the programme document.

    There is also a Risk-sharing Facility of $300 million, planned to address banks’ perception of high-risks in the sector by sharing losses on agricultural loans. There is equally an insurance Facility of $30 million intended to expand insurance products for agricultural lending from the current coverage to new products, such as weather index insurance, new variants of pest and disease insurance.  Besides, there is also a Technical Assistance Facility amounting of $60 million meant to equip banks to lend sustainably to agriculture, producers to borrow and use loans more effectively and increase output of better quality agricultural products, among others.

    The improvement in the sector was linked to access to credit through the new policy on increasing private sector participation, emphasis on the entire agriculture value chain, and using agriculture to boost employment, wealth creation and food security.

    Analysts have commended the performance by the banks as a demonstrating of their belief in the ability of agriculture to transform the economy. The CBN said with the credit trend in the banks, Nigeria may be close to realising its economic diversification objectives that will lead to less dependence on oil.

     

    Stakeholders speak

    Chairman, the Tractor Owners & Hiring Facilities Association of Nigeria (TOHFAN), Alhaji Danladi Garba,

    said Nigeria could produce food, noting that agric business is profitable. He said that gone were the days when borrowers beg banks to lend to the agric sector. Today, the tides have turned. The buzz for agric financing is on, and no lender wants to be left behind.

    Also some banks are also supporting agriculture. For instance, Sterling Bank Plc has financed the purchase of tractors for members of the TOHFAN. The bank noted that its involvement in the agricultural sector was based on the need to reposition the sector as the main stay of the economy given the dwindling oil revenue.

    The bank’s Managing Director, Yemi Adeola, said it finances the purchase/acquisition of tractors from reputable manufacturers such as Massey Ferguson, Mahindra, New Holland, John Deere and Tak Tractors, who will also provide basic training on utilisation and offer after-sales maintenance services.

    The tractors which have been distributed to members of the association following the first disbursement would help in the adoption of mechanised agriculture, leading to additional hectare coverage, higher yields and enhance food security in the country.

    “Sterling Bank Plc has continually restated its commitment to the strategic growth of the agricultural sector by providing adequate funding in alignment with the ongoing reforms in the sector aimed at repositioning it as an attractive business proposition, an input provider for the manufacturing sector and a key foreign exchange earner.

    “The best bank in Agric Award was conferred on the Bank in recognition of its critical role in the dispensing of financial services to actors in the Nigerian agricultural value chain. This we have demonstrated again with the financing of the tractors which will add value to the sector,” he said.

    Also, First City Monument Bank said it will continue to  intensify its support to the agricultural sector and its value chain including lending more to the subsector in the interest of the economy.

    “We note that four basic commodities that are consumed by Nigerians – rice, wheat, fish and sugar jointly account for a significant amount of the country’s annual import bill. We are convinced that the nation has the capacity to produce these consumables in required amounts to meet our domestic consumption needs. With its attendant impact on GDP and job creation, agriculture remains a critical focus sector of the financial system,” it said.

    The bank said the lender is focused on being a strategic partner to the government and other stakeholders in the agric sector to ensure food sufficiency, employment and revenue generation.

  • NCRIB advocates compulsory agric insurance for economic growth

    NCRIB advocates compulsory agric insurance for economic growth

    The Nigerian Council of Registered Insurance Brokers (NCRIB) has underscored the need for government to make agricultural insurance compulsory in the country.

    NCRIB President, Shola Tinubu, made this known while addressing Course 39 set of the Nigerian Institute of Policy and Strategic Studies (NIPSS), Kuru.

    According to him, the government’s quest to reflate national economy and put the nation on sustainable path of economic vibrancy should necessitate the need to make agricultural insurance compulsory as a pre-condition for facilities, subsidies and other government support.

    Tinubu, who applauded government’s progressive moves to diversify the economy from oil to non-oil, averred that in order to increase insurance penetration in a geometric proportion there should be concentration on the Agric sector in terms of marketing the intrinsic value of Insurance products to farmers and other Agricultural and Agro allied sectors.

    He highlighted the need for the government to embrace insurance in its efforts to take prudent economic strides, considering the scarce resources and government’s tight budget  make it less likely to easily replace assets in the event of loss.

    He opined that it was time for governments across levels to transfer their risks to the insurance market and free funds for other developmental projects, noting that the time was ripe for them to issue directives to ensure that all assets are insured through licenced insurance brokers, with risks premiums provided for in their yearly budgets.

    On payment of bidding fees by brokers, NCRIB President urged the government to retool the procurement rules for brokers, making it to be in tandem with similar professional bodies like lawyers, accountants, architects, and other allied professionals.

    Tinubu urged Nigerian Interbank Settlement System (NISS) to utilise its pivotal position to advice government on the crucial roles of brokers in the insurance value chain and the growth of the industry, which he noted was the linch pin of sustainable economic growth of progressive nations in the world.

    He lauded NIPSS for retaining its prestige as the foremost leadership institution in the country, with attendance of top level policy makers and executors drawn from different sectors of the economy, with a view to widening their outlook and perspectives on issues and improving their conceptual capacity..

    He further said the Council has joined the league of notable professional bodies and functionaries, such as the Central Bank Governor; the Service Chiefs; the Inspector General of Police and numerous academia, who had in past added value to policy conception and advocacy roles of the Institute.

    Earlier, the Acting Director-General of the Institute, Jonathan Juma, advised the insurance industry to create more awareness about the value of insurance to national economy and be ingenious in the creation of valued products that would meet the needs of the people.

    He said from comparative studies the industry is the main catalyst of economic growth in most advanced climes visited by the institute and there was no basis why Nigeria should not witness the same development if the industry positioned itself positively for desired growth and profitability.