Business
Leaked letter by Poultry Farmers Association triggered CBN emergency approval to import maize
Poultry Farmers called on Buhari to allow a guided importation of Maize in order not to shut down their industrt.
A letter from the Poultry Farmers Association of Nigeria is touted as the trigger for the recent decision by the Central Bank of Nigeria to approve emergency importation of 262,000 tons of maize into Nigeria.
Nairametrics confirmed this, after sighting the letter signed by the President of Poultry Farmers Association, Onallo S. Akpa, dated July 3rd, 2020. In the letter, the association called on President Buhari to allow for guided importation of maize, in order not to shut down the poultry business in Nigeria, since poultry farmers rely heavily on maize to feed their chickens.
The laundry list of what they asked for include:
- The FG should instruct the Federal Ministry of Agriculture & Rural Development, to release 300,000Mt of maize and 10,000Mt of soyabeans to the association, at subsidized rates, in order to keep the poultry industry going.
- A guided importation of maize in order not to shut down the entire poultry industry in Nigeria. They specifically requested for a Feed Grade Maize of 2,100Mt and soyabeans meal of 10,000Mt.
- Poultry farmers will be the ones to import the maize and soyabean meal themselves, which they will make available to their members.
- That the importation will serve their needs for 5 months.
- That the FG should make available $70 million in forex at the prevailing exchange rate, for the importation of Feed Grade Maize and soyabeans.
- Import duty and VAT exemptions to sustain the poultry production business, and stabilize protein supply for the country.
- Halt the export of ‘critical commodities’ to neighboring countries, in order to ensure food security for Nigerians.
The motive for CBN’s import Ban
The Central Bank, in July, adding to its 41 items ban list, announced a ban on forex for maize importation into the country, so local farmers could compete. It is unclear if the CBN was privy to this letter when the circular was issued on July 13th, 2020.
However, soon after the ban was announced, criticisms poured in against the CBN directive.
The CBN has also heavily invested in agriculture, through several intervention funds directed at farmers. A source at the CBN informed Nairametrics that the quantum of investments in the sector was a major factor in deciding on the import ban.
The apex bank has resorted to restriction of access to forex as a monetary policy tool, to dissuade importation of items that compete directly with locally produced substitutes, backed by intervention programs.
Since last year, the Federal Government has closed the country’s borders to the importation of goods, piling pressure on Nigeria’s trade, and jacking up inflation. Nigeria’s food inflation has risen to 15.48% as of July 2020, on the back of several policy measures of the government.
Poultry Farmers Association is the trigger
The letter from the poultry farmers, who are also benefiting from a ban on the importation of frozen chicken, demonstrates how difficult it is to stir local production through government actions such as import substitution, bans on forex access, and increase in import duty.
It also highlights the challenges of policymaking, particularly by the CBN, who is often blindsided by several other fiscal policies working at cross purposes. The letter from the Poultry farmers is a classic example.
When the ban on importation of maize was first announced, policy analysts pointed to the likely effect it could have on poultry farmers. In a report, the Academic Director, Agribusiness, Lagos Business School, Dr. Ikechukwu Kelikume, explained that the policy could further compound the woes of poultry farmers, given that maize, which constitutes over 50% of poultry feed content, is currently very scarce, and where available, very expensive, with an ever-increasing price.
On the consequences of the CBN directive, “The situation spells doom for poultry farmers across the country, who are beginning to cut down on production, because of the high cost of feed and imported medication for the birds. A negative spillover effect of the high cost of feed is egg scarcity, and a consequent rise in its price across the country. The implications of the current challenges in the maize value chain are that, the gains of employing more people in the agricultural sector will be rolled back in the coming months.” said Kelikume.
Mr. Kalu Aja, CEO, AfriSwiss Capital Assets Management Limited, speaking to Nairametrics says it’s simple “supply fell,” citing that it is basic Economics 101, “if you ban a product supply where demand remains same, the price will increase.”
He added that banning the import of maize will affect the poultry industry, as other feeds go up, especially chicken feed, since maize is an important component for poultry, and with the chicken feed going up, the cost may have to be passed to the consumer.
FG u-turn
As the controversy raged on, pressure piled on the government to assuage their request, culminating in the President deciding early in September, to release 30,000 tons of maize from the Federal Reserves to animal feed producers, in order to deal with the high cost of poultry production after the ban on maize imports.
The next day, the Nigeria Customs Service confirmed that four companies were given CBN emergency approval, to import 262,000 tons of maize into Nigeria. The companies are Wacot Limited, Chi farms Limited, Crown Flour Mills Limited, and Premier Feeds Company Limited.
A reliable source at the CBN also informed Nairametrics that the decision to select these four companies was because they were already implementing backward integration operations, and they are the largest importers of Maize in the country. They also will not be utilizing the nation’s forex reserve, as they will rely on their own forex exchange sources to process Form M required to facilitate the imports.
Despite the lifting of the ban for the importation of maize, the government is still insisting on its forex for food ban, maintaining that the policy was aimed at protecting local production.
Bottom Line: Nigerians will at some point have to choose between accepting foreign imports, and its attendant negative consequences, which include, killing of farming jobs, mothballing of factories, and risk of food security due to its heavy reliance on imports. The other option is to protect local production and forex reserves while facing the short to medium term pain of higher food prices.
Business
It would be difficult to find loans to finance rail to Niger Republic – Cheta Nwanze
Finding loans to finance rail to the Niger Republic would be difficult, says Cheta Nwanze.
Cheta Nwanze, Lead Partner at socioeconomic research firm, SBM Intelligence, says that it would be difficult to find loan financiers for the proposed $1.9 billion rail project from Kano to Maradi in Niger republic.
Cheta, in an interview with Nairametrics on Friday, explained that it appears that Nigeria is more keen on the project than Niger Republic.
READ: Ghana blows hot over Nigeria’s $2 billion rail project that involves Amaechi
Back story: Nairametrics reported this week that the Federal Executive Council has approved the disbursement of $1.96 billion, for the railway line from Kano in Nigeria to Maradi in Niger Republic.
According to the report, the President is also expected to commission the Warri-Itakpe standard gauge rail line, running through Kogi, Edo, and Delta States.
“Nigeria is investing so much in this rail line, given that we are Niger’s 4th largest trading partner,” Cheta said.
READ: FG threatens to disconnect Togo, others from electricity over $16 million debt
He added that Niger, although being landlocked already, has an existing infrastructure for its imports and export services, which is much better utilized than Nigeria’s export infrastructure.
“The majority of their imports from France, China, and the USA come in via the port of Lome, precisely because the port in Lome works, and the rail link in Togo is much better than ours.
“Nigeria, on the other hand, has let its Apapa port to become a wreck, while transportation between Lagos and Kano/Jibia is a nightmare, if we’re being charitable with words.”
(READ MORE: Trade and Investments, a way out of Nigeria’s economic troubles – Fola Fagbule)
According to him, with the reality of the Apapa congestion and other factors, finding fund for such project, when debt to service ratio is high and amidst reduced oil revenue, will be difficult.
READ: Local refining; A panacea for Nigeria’s reliance on imported refined products
“With these realities in mind, I find it difficult to imagine who will extend such a loan to Nigeria, especially since, as far as all the information available to me indicates, Niger does not seem as keen on pushing this as Nigeria does,” he added.
However, the media aide to President Buhari, Garba Shehu, disclosed that the Federal Government is not constructing a rail line from Nigeria linking Kano-Dutse-Maradi into the Niger Republic, as it will only stop at the designated border point.
READ: NDDC Probe: Senate orders IMC to refund N4.9 billion illegal payments
Maradi is 55km from the Katsina border Town of Jibia.
Business
Canada invites another 4,200 Express Entry candidates for permanent residency
Canada has invited 4,200 immigration candidates to apply for permanent residency.
As countries around the world commence relaxation of ban on international travels, the Canadian government has issued another round of invitation to 4,200 Express Entry Candidates, to apply for its permanent residency.
Canada held its 163rd Express Entry draw, inviting 4,200 immigration candidates to apply for permanent residence on September 16, being the second draw this month, with a comprehensive ranking system (CRS) score of 472. This is three points less than the previous draw held earlier in the month.
This draw matches the 4,200 ITAs issued in an Express Entry round on September 2, which ties it for the second-biggest draw ever. The biggest draw issued 4,500 ITAs on February 19, 2020. The large number of invitations being issued by Canada is a strong indication that it remains committed to welcoming high levels of immigrants in 2021 and beyond.
READ: Jobberman launches ‘Best Match’ product to get employers the right candidates, faster
The recent round of draw brings the total number of invitations issued this year to 74,150; a new record for this date, indicating an 86.4% success rate.
IRCC used its tie-break rule in this draw. The timestamp used was March 9, 2020, at 13:03:40 UTC. This means that all candidates with a CRS score above 472, as well as those candidates with scores of 472 who entered their profile in the Express Entry pool before the selected date and time, received an ITA in this invitation round.
This rule is used to rank candidates, who have the same CRS score. A candidate’s CRS score remains the primary factor in selecting candidates to be invited to apply for permanent residence. Factors that can affect the cut-off CRS score include the size of the draw (larger draws can produce a lower minimum CRS score), and the time between draws (shorter periods between draws can help to lower the CRS score).
READ: 13.9 million Nigerian youth are unemployed – NBS
How it works
Express Entry, is the application system that manages the pool of candidates for Canada’s three main economic immigration classes — the Federal Skilled Worker Program (FSWP), the Federal Skilled Trades Program (FSTP), and the Canadian Experience Class (CEC). The highest-ranked candidates in the Express Entry pool are issued ITAs in regular invitation rounds.
A set number of the highest-ranked candidates are invited to apply for Canadian permanent residence, through regular draws from the pool. These invitation rounds typically take place every two weeks, and the vast majority involve candidates from all three Express Entry-managed categories.
Eligible candidates for each program are issued a score under Express Entry’s CRS, which awards points for factors such as age, education, skilled work experience, and proficiency in English or French.
While a job offer is not required in order to be eligible under the Express Entry system, the CRS does award additional points to candidates who have one. It is worth noting that the Government of Canada has a processing standard of six months for permanent residence applications, filed through the Express Entry system.
Nigerians trooping to Canada
According to the report, Nigeria was the fifth highest country, that migrated into Canada in the month of July 2020, behind India, China, Philippines, and Pakistan. This is an indication, that Nigerians are taking every opportunity possible to move into other countries of the world, perceived to give better opportunities in terms of education, career growth, sufficient earnings, amongst others.
A recent report published by CEOWorld Magazine, reveals that Canada is the third world’s best country to start a career in 2020, which is why many people around the world would troop in numbers, seeking to migrate to the country, while Nigeria on the other hand ranks bottom four, with the likes of Libya, Syria, and Yemen.
Business
Lagos State government seals warehouse repackaging expired curry powder
Following an anonymous tip, LASCOPA has sealed off a warehouse where expired curry powder was being packaged.
The Lagos State Consumer Protection Agency (LASCOPA), under the aegis of the Lagos State Government, has sealed a warehouse for repackaging unwholesome and expired curry powder.
This disclosure was made this morning in a press release to the general public, which was seen by Nairametrics, via the official website of Lagos State Government.
READ: Lagos seals 22 other buildings in Banana Island, Ikoyi axis over permits
Acting on an anonymous tip-off from a member of the public, the Special Monitoring Team of LASCOPA, led by its General Manager, Mrs. Kemi Olugbode, paid an unscheduled assessment visit to the warehouse, to verify the claim. The tip turned out to be genuine.
This decision is in line with the State Government’s core mandate of protecting consumers from unwholesome products. The warehouse which was sealed by LASCOPA, for repackaging unwholesome and expired curry powder with the name Chinchilli and Ducross for sale, was said to be owned by Canvest Nigeria Limited. The warehouse is located at Plot 4, Cocoa Industrial Road, Ogba, Ikeja.
The General Manager, speaking after the exercise, said the enforcement team discovered thousands of expired products stored in cartons, while some were found in sacks that were ready to be repackaged for sale in the market.
(READ MORE: Lagos to remove illegal structures obstructing Lekki Regional Road project)
The Head of LASCOPA, emphasized that the staffs of the company involved in the fraudulent operation have been arrested. Olugbode disclosed that the property will remain sealed until the government commences prosecution of the owners of the warehouse, and all those involved in the illicit activity are apprehended.
Mrs. Olugbode, also encouraged members of the public to support the present administration’s determination to rid Lagos of all illegal activities, by reporting those who are engaged in unwholesome activities that are detrimental to the health of residents.
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Anonymous
September 14, 2020 at 7:27 am
Your bottom line statement is quite mischievous.
Are those the only options available?
A Nigerian
September 15, 2020 at 6:11 pm
Your bottom line misses the plot of the whole maize issue – which is scarcity caused by lack of production capacity -and contradicts the points raised in the article.
Say we choose local production and the higher prices in the short to mid term, what do farmers do when there is scarcity of inputs like maize for chicken feed? For many inputs, it’s not even a case of higher prices alone, it’s total scarcity. What do we do when this choice leads to massive shortage? Do we now start rationing? Lol
Perhaps the issue of local production is a lot more nuanced and attacking it like a hammer seeing nails (closed borders, fx bans etc) isn’t the way forward. Perhaps we should address the issues that have stifled production capacity and ease of doing business first, before we start trying to throttle imports to death.
Valentine St. Godwins
September 15, 2020 at 8:05 pm
It is unfortunate that the federal government and CBN after encouraging the big time farmers like me to go into large scale maize farming production for the 2020 farming season with the very high cost of fertilizer and other inputs us going ahead to encourage the importation of the same banned maize due to the blackmail from Poultry farmers association who themselves are beneficiary of Federal Government ban on poultry products, as it were those of us who went into large scale maize farming are already counting huge lost due to the very selfishness of the poultry farmers association, the question is what stops the poultry farmers association from encouraging their members to go into maize farming in order to produce their poultry feeds themselves while at same time helping Government to reduce the importation of maize while saving the very scarce exchange.