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Business News

CBN to restrict foreign exchange on more food imports  

The CBN has announced that it would start to restrict foreign exchange for the importation of cassava, and other products into Nigeria.

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CBN advances ban on food imports , Emefiele, Nigeria’s manufacturing sector contracts, as key components shrink, CBN makes case for PSBs, cautions Banks, PSBs against demarketing , Banks' deposit with CBN dropped 68% in 9 months , Devaluation’s drum beats louder

The Central Bank of Nigeria (CBN) has announced that it would start restricting foreign exchange for the importation of cassava, starch, ethanol and other products into Nigeria. 

Godwin Emiefele, CBN Governor said this while hosting about 18 governors and two deputy governors at a meeting held at the CBN headquarters. 

The meeting was held to discuss ways in which CBN would help in boosting the economy and create employment. The President, Muhammadu Buhari had directed that the bank should boost production of 10 key commodities in the country. 

[READ MORE: CBN offers clarification on cashless policy, but Nigerians aren’t having it]

The 10 key commodities include rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock/dairy. 

According to EmiefeleNigeria is the world’s largest producer of cassava tubers with 53 million metric tonnes per annum, yet the country imports cassava derivatives with over $600 million each year. 

While disclosing plans of the bank, he stated that the cassava initiative of the bank was aimed at improving productivity, stabilising prices and encouraging local processing to generate employment. 

“To improve the cassava seed productivity, the bank is collaborating with the International Institute for Tropical Agriculture on the production and supply of cassava cultivars that can increase yield up to 40 tonnes. Arrangements are underway to support 51,388 farmers to produce 830,820 metric tonnes of cassava tubers for some identified processors. 

“The country imports cassava derivatives of over $600m per year and we have also begun to restrict foreign exchange to those who want to import cassava, starch, ethanol and all other derivatives into Nigeria,” the CBN governor said. 

Emiefele further shed light on the CBN’s plans to enhance agricultural development. He said the bank was focused on boosting the production of identified agricultural commodities that have high growth enhancement impact. 

The CBN Governor also made it known that the bank had financed the construction of rice mills to support food self-sufficiency and security as well as the cultivation of 200,000 hectares of hybrid cotton to be distributed to 200,000 farmers in 26 states in the country. 

[READ ALSO: Diary Production: Herdsmen to leverage on CBN’s Anchor Borrowers Programme]

What you should know: The latest action by the CBN should not come as a surprise, as the bank had reiterated its commitment to restrict FOREX for food imports. Adding the cassava products to the list of the import restriction list shows that the bank is not stopping anytime soon in tightening the noose on food importation. 

 

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Chidinma holds a degree in Mass communication from Caleb University Lagos and a Masters in view in Public Relations. She strongly believes in self development which has made her volunteer with an NGO on girl child development. She loves writing, reading and travelling. You may contact her via - [email protected]

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Business News

SpaceX says it’s pursuing necessary licenses to bring Starlink to Nigeria

Broadband penetration of 70% which covers 90% of the population is the FG’s target in its National Broadband Plan (NNBP), 2020-2025.

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Telecoms sector remains resilient as broadband subscriptions climb

American private space exploration company founded by Elon Musk, SpaceX says it is working to pursue all necessary licenses needed to bring the Starlink Satellite internet services to Nigeria.

This was disclosed by Mr Ryan Goodnight, SpaceX’s Starlink Market Access Director for Africa in a meeting with NCC’s Executive Vice-Chairman (EVC), Prof. Umar Danbatta on Friday in Abuja.

What SpaceX is saying about Starlink in Nigeria

“SpaceX has been in discussion with NCC virtually over the past several months to begin the process of pursuing all necessary licences to bring Starlink, its satellite-based broadband services, to Nigeria.

Having made substantial progress in the discussion, the commission granted SpaceX’s request for a face-to-face discussion to gain better insights on the prospects,” they said.

The NCC stated that it has listened to SpaceX’s presentation and will review it vis-à-vis its regulatory direction of ensuring an effective and sustainable telecoms ecosystem where a licensee’s operational model does not dampen healthy competition among other licensees.

“As the regulator of a highly dynamic sector in Nigeria, the commission is conscious of the need to ensure that our regulatory actions are anchored on national interest,” they said.

NCC added that broadband penetration of 70% which covers 90% of the population is the FG’s target in its National Broadband Plan (NNBP), 2020-2025. This is also in line with its National Digital Economy Policy and Strategy (NDEPS), 2010-2030.

What you should know

Starlink is an internet service launched by SpaceX to improve internet coverage in rural and underserved areas globally. Starlink satellites are over 60 times closer to Earth than traditional satellites, resulting in lower latency and the ability to support services typically not possible with traditional satellite internet.

Nairametrics also reported this month that the  Federal Government announced a deal with Microsoft through the Federal Ministry of Communications and Digital Economy for the development of high-speed internet infrastructure across the six regions in the country.

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What FGN Free Meter Program means for the power sector

Without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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Electricity, Buhari moves against Discos and agents that collect money for prepaid meters

According to news reports, the Minister of Power, Mamman Saleh on Wednesday said the distribution of the four million free electricity prepaid meters pledged by the Central Bank of Nigeria would soon begin across the country.

According to him, the government is wrapping up the distribution of its initial one million meters, which he labelled phase zero, and would soon begin the distribution of the four million sponsored by CBN, which he tagged phase two. He also noted that the Federal Executive Council approved N3bn for the execution of six major electricity projects in the country to upgrade Nigeria’s electricity facilities and improve power supply across the country.

Ineffective metering remains a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they have not consumed through estimated billing by DisCos.

DisCos have been largely unsuccessful with metering their customers.

As far as inadequate metering is concerned, DisCos over time, have used this situation to their advantage via estimated billings. It appears that fully metering customers are currently being viewed as a disincentive, given that estimated bills can easily be manipulated.

According to a report by the Nigerian Electricity Regulatory Commission (NERC), only 4,234,759 (40.27%) of the total customer population of 10,516,090 were metered as of 30 June 2020. Clearly, this validates the widely held view that there are a wide number of customers on estimated billing which gives room for illegal connection to the networks and in turn corrupt practices. NERC further revealed that only three out of 11 Electricity Distribution Companies in the country had metered more than 50% of electricity customers under their coverage areas as of June 2020.

Effective metering in our view is one step ahead in solving the myriad of problems embattling the Nigerian power sector. Though supposed to be unpaid for, many customers in a bid to avoid the bureaucracy associated with getting meters have paid to get their own meters. We believe the provision of meters to all end-use customers will go a long way in ameliorating the liquidity squeeze in the power sector whilst also providing cashflow to the DisCos for investment in equipment needed to evacuate unused electricity to consumers nationwide.

We laud the FG’s efforts at distributing meters freely to end-users, but we note that without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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