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Business News

Why Brazil is preparing to invest $1.1b in Nigeria

Brazil will soon invest as much as $1.1 billion dollars in Nigeria, the country’s Ambassador to Nigeria (Ricardo Guerra de Araujo) disclosed.

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Brazil's President, Michel Temer

The Federal Government of Brazil will soon invest as much as $1.1 billion in Nigeria, the country’s Ambassador to Nigeria, Ricardo Guerra de Araujo, disclosed on Thursday.

The Ambassador stated that the deal will be finalised by the end of October this year, even as the fund will specifically be targeted at boosting Nigeria’s agriculture sector.

Mr Araujo made this disclosure while speaking at a dinner in Abuja to sensitise Nigerians ahead of an Agrictech event being organised by the Osun State Government.

 The investment will help mechanise farming

The $1.1 billion will mainly be used to procure tractors which the Brazilian Government believes will help mechanise Nigeria’s agriculture, as well as boost overall productivity. This would, in turn, ensure food security and financial opportunities for farmers, the Ambassador said.

Note that the fund will come from the Brazilian Exim-Bank, while the Central Bank of Nigeria will coordinate the concessional resources needed. The financing deal has been designed to last for thirteen years, with a ten years repayment plan.

This partnership was an initiative of Nigeria’s Ministry of Agriculture and Rural Development, the Ambassador said. It is expected to help salvage Nigeria’s struggling Agric sector by ensuring efficient productivity, enhanced market accessibility, and the mitigation of climate-change related hazards.

The programme will also reduce hard labour and the stress that is typically associated with farming in Nigeria. In the same vein, it will help provide employment to Nigerians, especially the teaming unemployed youths of Nigeria.

“It will also keep the youth busy because they will be employed, and create development in the area where the plant is established.” -Araujo

With its large expanse of arable lands, Nigeria has a huge Agric potential which has not been fully explored. This is due to the unnecessary focus on oil. Efforts by the Federal Government to diversify the economy has yet to yield the needed result.

The Agric sector contributed only 22.86% of Nigeria’s Gross Domestic Product (GDP) in the second quarter of 2018 according to the Nigerian Bureau of Statistics, NBS.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Consumer Goods

Sell-off of shares by investors extend Flourmillers loss on NSE to N25 billion

Nigerian Flour millers on NSE suffer a decline as wary investors offload shares.

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Bloody February: Sell off of shares by investors extend Flourmillers loss on NSE to N25 billion

The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.

It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.

The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.

A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.

How they have all performed

FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.

However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.

Market activity

At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.

Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.

The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.

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Business News

FG says Finance Bill 2020 will check inflation

The Finance Minister has stated that the reduction of import duties on vehicles will subsequently reduce transport fares and food prices.

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Power: Mambilla Power Project not prioritised by Ministry of Power for 2021 Budget - Finance Minister

The Federal Government has said that the Finance Bill 2020 was designed to reduce import duties on some commodities, including vehicles, thereby checking inflation.

This is as the Bill was part of measures to make transportation affordable, thereby reducing the cost of foodstuff across the country.

According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while answering questions from State House correspondents in Abuja on Wednesday.

Ahmed explained that her Ministry advocated and got approval for a reduction in the import duties charged on vehicles precisely to check inflation trends.

READ: FG to withdraw $150 million from sovereign wealth fund, to borrow $6.9 billion

What the Minister for Finance is saying

The Minister expressed concerns over the inflation rate in the country, saying inflation was high at 16.7% and still inching up gradually over the last couple of months.

Ahmed said, “When you look at the components that constitute inflation in our country, the largest contributor is food inflation and … if you decouple it, the largest contributor to food inflation is the cost of transport.

“We now look at how do we reduce the cost of transport because we can’t give every Nigerian money to pay for their transportation fares. We figured that one of the good ways to do it is to increase the acquisition of mass transit vehicles and to reduce the acquisition cost of vehicles and tractors that are used for productive purposes like agriculture.”

READ: Nigeria to receive first tranche of World Bank’s $3 billion loan soon

She expressed optimism that the reduction of the import duties on vehicles, when fully operational, would boost mass transit activities and subsequently reduce transport fares and food prices.

She said, “So the reason why we reduce those duties is to reduce the cost of transportation.

”So, once this implementation takes full effect, we are hoping that we’ll be able to see more tractors coming into the country, more mass transit buses coming to the country, reducing the cost of transportation as a result, and also having an impact on food prices.

What you should know

  • It can be recalled that as part of its bid to introduce tax incentives in the face of the economic downturn caused by the coronavirus pandemic, the Federal Government in November 2020, through the signed Finance Bill 2020, proposed the slash of import duties for tractors, buses and other motor vehicles from 35% to 10% and 0% to further help cushion the socio-economic conditions in the country.
  • The Minister for Finance, Budget and National Planning had explained that the need to reduce food inflation figures through one of the causative factors of high production cost, which is transportation, inspired the bill.

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