Yesterday, the National Horticultural Research Institute (NIHORT) announced at its 2-day workshop that Nigeria’s tomato supply gap now stands at 700,000 metric tonnes. According to the institute, Nigeria now produces 2.3m metric tonnes of tomato per annum. This represents a 27.8% increase from 1.8m metric tonnes produced by the country 2 years ago. Nigeria remains the largest producer of tomato in Sub-Saharan Africa.
According to the CEO, NIHORT, Abayomi Olaniyan, the institute and several other partners pulled resources to invest in training and technology for tomato farmers which served as the primary catalyst for the improvement witnessed in tomato production in Nigeria.
One of the major policy mantras of the administration of President Muhammadu Buhari has been diversification of the Nigerian economy from being an oil-focused economy. This has necessitated significant investments in Agriculture through several schemes such as the Anchors Borrowers Program (ABP).
The CBN, as part of its efforts in encouraging local production, also placed tomato & tomato paste imports on the FX restriction list. We believe this has led to significant investments in the production of the fruit as revealed by NIHORT. On the negative, the move to protect local farmers has led to higher prices due to the huge supply gap which was previously filled by imported tomatoes.
[READ MORE: Palm Oil: Industry potentials remain untapped)
Despite the significant attention tomato production and tomato processing has received with investments such as Dangote’s US$3bn tomato processing plant established in Kano, we believe the country’s production capacity remains significantly undertapped. Nigeria’s favourable weather conditions and large arable land puts the country in a good position to become a major tomato exporter. The CEO, NIHORT noted that the primary challenges limiting tomato production capacity in Nigeria are poor tomato nursery practices and after harvest yield loss.
Tomato nursery is a major prerequisite to produce quality seedlings which forms the base for sustainable tomato production. Tomato seedlings are typically raised in nurseries before they are transplanted to the fields. Tomato nursery management is a significantly expensive venture for many farmers in Nigeria (many of whom are smallholder farmers) and typically have to buy the seedlings from other countries.
Furthermore, post-harvest losses of tomato in Nigeria is estimated at 40%. These losses arise largely due to a combination of poor transportation infrastructure & inadequate storage facilities. Tomatoes are predominantly grown in the north but mainly consumed in the southern part of the country. Decrepit transport infrastructure often hinders the swift movement of harvests from the north to south where they would be sold. In addition, the predominant preservation method for Nigerian tomato farmers is sun-drying which leads to losses due to rainfall and animals who devour them while they are being dried.
Beyond the provision of finance, we think investment in adequate and reliable transport systems such as electric rail systems as well as modern storage facilities will go a long way in improving domestic production and attracting private sector investment.
CSL STOCKBROKERS LIMITED CSL Stockbrokers,
Member of the Nigerian Stock Exchange,
First City Plaza, 44 Marina,
PO Box 9117,
CBN vs Cryptocurrency; the gold rush, time for a change?
Despite the CBN’s concern about Cryptocurrency in Nigeria, the cryptocurrency space has continued to roll out ingenious solutions to real-world problems.
Despite the Central Bank of Nigeria expressing its concern about Cryptocurrency in Nigeria, the cryptocurrency space has continued to roll out ingenious solutions to real-world problems. One of the most recent solutions is the advent of Non-Fungible Tokens (NFTs), a unit of data stored on a blockchain to certify that a digital asset is unique and non-interchangeable. It is an innovation that allows that an artist gets digitized title/ownership for their work.
Based on a report from Coinbase yesterday, NFTs’ adoption is fast growing among Nigerian creatives, given that it provides a marketplace for creatives and art collectors across the globe. Although currently, the platform has recorded complaints from some artists whose artworks were minted without their consent, the platform’s potential market for African creatives is undeniably massive.
Over time, the Nigerian creative industry has been quiet due to perennial problems such as inadequacy of patronage and piracy, which disincentivizes players in the space. This problem, coupled with the apparent low interest in other economic segments, led to Nigeria’s current overdependence on oil receipt. Most creative deals in the Nigerian NFT space are currently being consummated anonymously.
Furthermore, Nigeria being the second largest market for cryptocurrencies globally over the last five years, with a market worth of trade totalling 60,215BTC, portends an interesting figure when the segments’ potential proceeds are considered.
According to the National Bureau of Statistics, Nigeria has an unemployment rate of 33.3% as of Q4 2020. There is also the recent prohibition of local banks from facilitating cryptocurrency transactions. As an offshoot, the NFT’s ability to provide support to the economy in the area of rightly engaging creatives and other providers of ancillary services in the segment could be frustrated.
There are also indications that Nigeria might be setting itself up to miss out on an otherwise potent foreign exchange source. In an era where oil receipt is becoming increasingly unreliable, avenues like this could provide a decent level of support given Nigerians’ tenacity and creativity, hence drawing more accretion to its external reserves.
It is undeniable that Cryptocurrency poses some downside concerns in how it could easily aid some undesirable ventures, such as money laundering and terrorism financing. Nonetheless, we noted that Authority’s efforts should be geared more towards finding common ground where those concerns could be mitigated instead of shutting down the entire space.
Noteworthy is that the buying and selling of cryptocurrencies have continued unabated since the last CBN’s directives were issued. Is it time to retract those directives and find a more effective way of combatting cryptocurrency concerns? Yes! However, we opine that as we advance, every move should be tailored to ensure Nigeria is not blindsided in this gold rush.
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.
SEC and the proliferation of unregistered investment platforms
The recent move has generated diverse views from stakeholders with some critics classifying this action as irrational.
According to a circular issued by the Securities and Exchange Commission (SEC), it affirmed its knowledge of the existence of trading platforms that allow investors access to securities listed in other jurisdictions.
The capital market regulator further reiterated the provisions of sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations which state that only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription through approved channels to the Nigerian public.
The announcement furthers SEC’s quest to strengthen investor protection, promote transparency in the operations of the Nigerian capital market and ensure all investment transactions are within the regulatory purview of the commission.
Recently, the capital market regulator introduced a new requirement for the inclusion of the commission’s contact details in all prospectuses or offer documents issued to the general public in a bid to ascertain the genuineness of such securities. Besides, it is often found that the activities of illegal fund managers become prevalent during a financial or economic downturn, making the public susceptible to the juicy yet unsustainable returns promised by these managers.
The recent move has generated diverse views from stakeholders with some critics classifying this action as irrational. They cited the impact of investing in foreign stocks on portfolio diversification and the role of Fintechs in driving financial inclusion among others. On the other hand, supporters of this action argued for the need to reduce the pressure on external reserves especially at a time when the green-back is needed to stimulate economic recovery.
Also, that it helps to safeguard the country’s investing community. We recall that the recent policy by the CBN to close all accounts by Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) involved in dealing with cryptocurrencies received a lot of backlash from the public.
On this move, however, we opine that it is still within the legal purview of the SEC to discourage investments in foreign listed securities. Nonetheless, we are aware of the concept of globalization in commerce and thus, there might be a need for a rejig of the Investment and Securities Act 2007, and other related acts to capture current trends and developments in the investment globe.
To avoid backlash going forward, we suggest more public education for clarity with regards to future policy decisions.
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.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Nigerian Breweries publishes names of over 100,000 shareholders who are yet to claim their dividends.
- 2020 FY Results: Sovereign Trust Insurance Plc records a 37% increase in profit after tax.
- CSCS Plc posts profit after tax of N6.93 billion in FY 2020
- BUA Cement Plc announces Board Meeting
- Infinity Trust Mortgage Bank Plc records a 60% increase in profit after tax in Q1 2021.