The African Export-Import Bank (Afreximbank) has disclosed plans to develop an African Cotton programme in order to help boost the cotton sector in the continent.
This was announced by the bank’s Managing Director for Intra-African trade, Kanayo Awani during the launch of the African Corner at the World Cotton Day organised by the World Trade Organisation in Geneva.
The Cotton Initiative tagged African Cotton Initiative (AFRICOTIN) is one that will involve upstream interventions, boosting production of cotton on the continent and downstream interventions, promoting and financing the consumption of cotton products.
[READ MORE: Afreximbank discloses plan to list via IPO]
Why this matters: Awani made known that the cotton value chain is a viable sector which provides income for millions of people in Africa. It is even more pertinent to those who live in rural areas as majority of them are into this line of business. Also, it represents an important source of foreign exchange for many countries.
For countries like Burkina Faso and Mali, Cotton accounts for a high percentage in their agricultural export value. Other large producers of Cotton in Africa apart from these two include Tanzania, Zimbabwe, Benin and of course, Nigeria.
According to Awani, Afreximbank has a cotton pipeline of about 400 million Euros, which includes $195 million dollars in textile and cotton parks located in Burkina Faso as well as textile and garments industrial parks in Nigeria.
What you should know: Recall that Nairametrics reported when the Governor of the Central Bank of Nigeria, Godwin Emefiele was quoted to have recognised the difference between the textile industry in the past and in recent times, as he acknowledged that the country’s textile industry was not contributing immensely to the economy as it used to.
Emefiele had noted that although the country’s textile industry is capable of transforming the economy by reviving the cotton and garment sector, thereby improving Internally Generated Revenue (IGR) across the three tiers of government, it was not doing so.
According to him, in the 1980s and 1990s, Nigeria was recognised as Africa’s largest textile industry with over 180 textile mills in operations, employing close to over 450,000 people, and contributing over 25% of the workforce in the manufacturing sector.
The CBN governor said the textile industry is now different entirely from what it used to be, and that most of the factories have all stopped operations. He said only 25 textile factories are operational at below 20% of their production capacity, and the workforce of the textile industry stands at less than 20,000 people.
The Afreximbank initiative can, therefore, be a wake-up call for the Nigerian textile industry as it may benefit from the 400 million euros cotton pipeline in store.
Covid-19: Pfizer, BioNTech’s vaccine ready before end of the year
BioNTech is in partnership with Pfizer to develop a coronavirus vaccine.
The Chief Executive Officer (CEO) of German biotech firm, BioNTech, has announced that the company and New York-based pharmaceutical giant, Pfizer’s Inc’s COVID-19 vaccine candidate is expected to be ready to obtain regulatory approval by the end of 2020.
The German biotech firm which is in partnership with Pfizer to develop this coronavirus vaccine is confident that it will be ready for regulatory approval by the end of the year.
The co-Founder and CEO of BioNTech, Dr Ugur Sahin, said that several hundred million doses could be produced even before approval and over 1 billion by the end of 2021, according to a wall street journal report.
The experimental vaccine which has shown a lot of progress against the fast-spreading respiratory illness in early-stage human testing is expected to move into a large trial stage that will involve 30,000 healthy participants later this month while waiting for regulatory approval.
According to an earlier report from Reuters, Pfizer and BioNTech are getting set to produce up to 100 million doses of the vaccine by the end of the 2020 and another 1.2 billion doses by the end of 2021 at sites in Germany and the United States.
It can be recalled that earlier this week, U.S. vaccine specialist, Novavax said in its statement that it will receive $1.6 billion from the federal government to support the development of its Covid-19 vaccine candidate as a new member of the government’s Operation Warp Speed (OWS) program, which aims to accelerate the development of a vaccine.
Guinea Insurance Plc gives optimistic Q3 earnings forecast in spite of COVID-19
Note that some companies have had to revise their earnings estimates due to pandemic.
Guinea Insurance Plc is being very optimistic, having projected a 78.6% rise in gross premium written to N1.8 in Q3 2020, up from N1 billion during the comparable period in 2019. The insurer also forecasted a profit after tax of N185.8 million for the period, indicating an expected better performance compared to N735 million loss recorded in Q3 2019.
The earnings forecast, which was sent to the Nigerian Stock Exchange earlier today, also estimated that reinsurance expense for Q3 will be at N337.5 million. Claims expenses, underwriting expenses, and other operating experiences were equally put at N331.3 million, N292.6 million, and N692.2 million, respectively.
Note that this forecast is coming amid the negative economic impacts wrought by the Coronavirus pandemic. But while a growing list of companies (including Guinness Nigeria Plc) has downgraded their 2020 earnings and profitability forecasts, Guinea Insurance is expecting growth and that is good.
In Q1 2020, Guinea Insurance Plc reported gross premium written OF N207 million and a profit after tax of N12.6 million. The company’s consolidated half-year 2020 financial has not been released and is expected sometime between this month and next month.
The company’s share price ended today’s trading on the Nigerian Stock Exchange at N0.20. Year to date, this stock has not recorded any price movement.
Manufacturers declare support for unification of exchange rate
Ahmed urged the CBN to tackle activities that made speculators manipulate the multiple exchange rates.
The President of the Manufacturers Association of Nigeria (MAN), Mr Mansur Ahmed, announced on Friday that the recent CBN unification of Nigeria’s exchange rate is a welcome development that will boost investor confidence in Nigeria.
He said the exchange rate unification will enable stable planned production for manufacturers in Nigeria leading to economic growth, adding that the Manufacturers Association had urged for an exchange rate unification to enable a market-friendly business environment in Nigeria.
“Clearly, this is a welcome development and a laudable initiative that has come at the right time. This is more so, particularly, now that the economic outlook is gloomy in light of the impact of the ravaging COVID-19 pandemic that has culminated in uninspiring macroeconomic situations,” he said.
He revealed that the World Bank had attributed Nigeria’s falling Foreign Direct Investment (FDI) to the multiple exchange rates as investors felt a “manipulation of the foreign exchange market.”
“The unification will also boost investors’ confidence, control rising inflation, and promote transparency, entrench better exchange rate management and eradicate distortions to the barest minimum,” he added.
He urged the CBN to tackle activities that made speculators manipulate the multiple exchange rates like “round-tripping” which he says expand the inflows of foreign investment into the economy.
He called on the Central Bank to implement 2 strategies to ensure a smooth transition into a unified exchange rate system.
“The first is to limit the short-term pains until efficiency gains materialize by responding swiftly with an inward-oriented rescue guideline while the second should seek to boost the pace at which such efficiency gains materialize,” he said.
He advised, it’s necessary the CBN “submit all the instruments of exchange rate determination” towards a free-market approach.