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World Bank says Nigeria is living on borrowed time 

The World Bank has stated that Nigeria is living on borrowed time as it continues to make financially irresponsible decision as regards food importation.

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The World Bank has stated that Nigeria is living on borrowed time as it continues to make financially irresponsible decisions as regards food importation. The World Bank said this is affecting local farmers and increasing unemployment in the country. 

The statement made by the Senior Agricultural Economist of World Bank, Adetunji Oredipe, at the agriculture summit Africa in AbujaOredipe said Nigeria has risen to become one of the largest importers of food in the world despite its resources. 

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According to him, $965 million was spent on importation of wheat by Nigeria in 2016, while importation of rice and sugar gulped $39.7 million and $100.2 million respectively. He queried Nigeria’s decision to spend $655 million on fish importation despite the country’s marine resources, rivers, lakes, and creeks in Nigeria. 

[READ MORE: The Nigerian Afrobeats Music Industry Gains Global Momentum]

Oredipe said it was financially irresponsible, adding that, “None of the above transactions (importation of rice, fish, sugar) is fiscally, economically or politically sustainable. 

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“Nigeria is tragically living on borrowed time, a typical case of robbing Peter to pay. 

“For instance, each time we spend money to import rice, Nigerian local rice farmers are negatively affected in terms of morale, sales, and realisable income.” 

Nigeria has lost it place in the world: Oredipe said Nigeria has lost her position as one of the significant exporters of shelled groundnuts and palm oil as her glory days are now behind her.

“In the 1960s, we had glory. That glory was visible and significant for the global community to recognise and applaud. 

“Nigeria accounted for 42% of the world’s exports of shelled groundnuts. Our total export volume was 502, 000 MT. 

“This declined to 356 MT by 2016. Nigeria lost her leadership position and was overtaken by the USA, China, and Argentina. 

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“Nigeria was also the largest exporter of palm oil in the world and accounted for 27% of the global export volume for palm oil. 

“Indonesia alone recorded US$16.5 billion, 54.5% of total palm oil exports. Unfortunately, Nigeria is not listed among the first 15 as at this moment.” 

Revisit funding opportunities/policies: Oredipe said there’s a need to revisit the agricultural schemes and policies. According to him, it is necessary to encourage private investment and boost the potential of agriculture because people are discouraged by the profitability level which is low. 

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“The most fundamental cause of low investment in agriculture is the low expected profitability, which stems from low productivity.  Additional factors contributing to this situation include an unfavorable business climate; infrastructural deficiencies; limited access and use of long-term business credit; and the high risk of investment.” 

[READ ALSO: Nigeria received $5.82 billion capital inflows in Q2 2019, down by -31.41%]

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Adding that Nigeria accounts for 68% of the total tomatoes produced in West Africa due to the 1.8 million Metric Tonnes of tomatoes Nigeria produces per year, but 45% is lost during postharvest annually, while Nigeria is the largest importer of tomato paste from China and Italy, spending over N16 billion annually. 

To improve the situation in the agriculture sector and boost sells, Oredipe advised the government to link farmers with off-takers and processers. Our off-takers imports food items being produced by our farmers because they are not aware of the products in the local market.” 

He added that jobs had been affected because of the Agricultural failure, stating that countries that take agriculture seriously had been able to provide jobs for their citizens.

“Food producing factories in the Western world, Far East Asia and other countries employ millions of young people to produce and export food. This is a source of livelihood and it helps the workers to live well and go to school. 

Patricia

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits

According to the notice, Avuru will be considered a “good leaver” on his retirement.

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Seplat to acquire more oil & gas assets after Eland's acquisition

Co-founder and Chief Executive Officer of Seplat Petroleum Development Company Plc, Austin Avuru has retired as CEO of the company, but will remain on the board as a Non-Executive Director.

According to a notice sent to the Nigerian Stock Exchange and signed by the company secretary Mrs Edith Onwuchekwa, the resignation took effect on July 31, 2020.

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What this means

According to the notice, Avuru will be considered a “good leaver” on his retirement and receive his remuneration and benefits as such.

The Remuneration Committee has confirmed that Avuru will receive “a lump sum payment in lieu of notice equal to his salary, benefits, and pension allowance until November 18, 2020” as well as other security and travel benefits.

He would also receive a loss of office payment equal to 12 months’ salary, as compensation and in accordance with the Nigerian market practice.

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In line with the provisions of the Directors’ Remuneration Policy approved by shareholders of the Company at its 2018 AGM, he will also receive a pro-rata bonus (in cash) to reflect his time as CEO during the financial year, and same “will be provided in the Company’s Directors Remuneration Report for 2020 and subsequent years”.

Seplat will also vest awards made in form of deferred shares in 2019 and 2020 at the normal vesting dates, and subject to the achievement of the relevant performance conditions, and Avuru will be subject to the post-employment shareholding requirement for two years.

The company management and board appreciated Avuru for his ‘excellent leadership’ in growing the company to become a notable player in the Nigerian and wider African hydrocarbon industry.

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Backstory

On November 18 2019, Seplat Petroleum Development Company Plc announced that Mr Austin Avuru will be retiring as CEO at the end of July 2020.

This is in line with Avuru’s earlier plans to retire sometime around his 62nd birthday.

 

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Just in: Buhari orders payment of stranded NDDC scholarship students, commision gives reason for delay

The delay, it was revealed, was caused by the sudden death of the then EDFA of the commission.

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President Buhari Democracy Day speech

President Muhammadu Buhari has ordered the Niger Delta Development Commission (NDDC) to immediately pay the fees and stipends of the stranded Nigerian scholars who have been facing hardships abroad.

This was disclosed in a press statement by the NDDC and signed by the commission’s Director for Corporate Affairs, Charles Obi Odili, on Tuesday, August 4, 2020.

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Odili revealed that the delay in the remittance of the fees for these scholars was caused by the sudden death of the then Acting Executive Director for Finance and Administration, EDFA, of the commission, Chief Ibanga Etang.

Odili stated, “Under the Commission’s finance protocol, only the Executive Director (Finance) and the Executive Director (Projects) can sign for the release of funds from the Commission’s domiciliary accounts with the Central Bank of Nigeria, CBN. With the death of Chief Etang, the remittance has to await the appointment of a new EDFA’

Details later…

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NIPOST’s new charges could have ruined the e-commerce/logistics industry

The backlash NIPOST got from SME proved enough to get the attention of the FG.

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Minister denies approving NIPOST license fee increment , Isa Ali-Pantami, NCC to determine number of phone numbers entitled to an individual  

The Nigerian Postal Service introduced new charges that would cause an increase in the costs of licensing for logistics and courier service providers which resulted in major outrage all over the internet and rightly so.

According to the Vanguard, International courier services like DHL and UPS were expected to pay N20M for a new license and N8M annually while national service providers were to pay N10M for the license to operate and N4M for annual renewal. As for the logistics companies operating within regions, they were to pay N5M for license and N2M annually while firms operating within states got N2M for licence and N800,000 for renewal. Courier firms within municipalities were to pay N1M license fee and N400,000 annually and for SMEs, the license was set at N250,000 while the annual renewal is N100,000.

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Reportedly, the General Manager, Corporate Communications, Franklin Alao, said in a statement that the new regulations were not planned to frustrate ease of doing business rather they aimed to promote growth of MSMEs. He said, “It is part of the strategies to ensure effective service delivery as consumers would know the capacities of the operators they are dealing with… Kindly note that consumers of the courier service would be better off as this will drive charlatans out of the industry. Genuine and serious operators would come back to celebrate this move.”

Fortunately, all through last week, the backlash NIPOST got especially online from SME proved enough to get the attention of the Federal Government because as the Premium Times reported, on Saturday, Isa Pantami, the minister of communication and digital economy rejected the proposed increment on the fees for courier services companies by the Nigerian Postal Services (NIPOST).

Pantami said in a tweet, “Our attention has been drawn to an increase of license fee, which was not part of the regulation I earlier approved for you… Your Chair and PMG were yesterday contacted to put the implementation on hold and send a report to our ministry by Monday. Best Wishes”. Pantami also said “I know the economic challenges of NIPOST. However, looking at the economic hardships of our citizens, we need to suspend any move.”

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This could have been really bad

The increase in charges would affect three main industries in the economy: e-Commerce, SMEs and ride-hailing.

  1. On Tech Round Up, we discuss time and again how the e-Commerce growth in Nigeria is directly propositional to logistics. As a statement of fact, an e-commerce firm’s level of functionality is heavily based on the strength of their logistics abilities. In essence, e-commerce will not work without the backing of an effective logistics structure.

With Covid-19 came a boom in the Nigerian e-commerce space. Last week, we discussed the increasing interests in M&A deals as MumsVillage and Baby Bliss merged to form the Bliss Group. Also, many consumers had since the lockdown, become dependent on online shopping- this without a doubt will affect these groups of individuals if the government should let this charge increase happen. It will without a doubt increase the prices of goods online and eventually, the boom in online shopping culture may drop drastically.

  1. Small businesses are the backbone of our nation and the same can be said for most economies around the globe, this kind of outrageous increase on charges will only further discourage these already struggling businesses from operating. This increase in fees, if the minister had not interfered would have only made the entire situation of our economy worse. Allegedly, NIPOST had already started seizing delivery motorcycles and demanding fees up to N250,000 from some businesses. This is a lot of money right now especially with most of these small businesses and companies moving their operations online and using logistics to delve into untapped audiences.
  2. The Ride-Hailing Businesses too since the beginning of 2020 has had to readjust, restructure and reevaluate a lot of their offerings. For those firms who have delved into the logistics space full time, these charges may have completely ruined their already slim chance of surviving.

It is a struggle out in these streets. Nigerians and the Nigerian economy has suffered severely in these last few months due to the pandemic- businesses, companies, industries and individuals have been left to bear some great losses and it seems the not so great news keeps on coming.

Another reason why this agenda to increase fees appeared fishy was because they seemingly announced this right after the NIPOST had purchased a fleet of delivery motorcycle- so was it their intent to intimidate or maybe strong-arm the competition and monopolize the sector? Maybe we will never know but it definitely did not sit well with many Nigerians, hence the outrage on the internet.

Even if these charges do get implemented, the NIPOST needs to allow enough time for the economy to stabilize rather than implementing an outright increase that could result in the shutdown of operations of those involved in logistics. There are smarter more mutually productive ways to coexist. These governmental bodies need to figure these out and implement them, it is important for governments and industries to work together to manage the changes that will improve our economy.

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