Business Briefs
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Dangote Industries Limited has secured a $300 million facility from the African Development Bank, AfDB, to finance the construction of its crude oil refinery and Greenfield fertilizer manufacturing plant. According to the AfDB, the loan is designed to help boost fuel supply and fertilizer production in Nigeria.
The AfDB said both projects would help the country in becoming self-sufficient in its local natural resources and also to improve its refining capacity in keeping with its goal to transform into a major exporter of oil and gas. The facility, according to the AfDB, is projected to reduce more than 80 percent of the country’s current imports of fuel as well as eliminate the importation of fertilizer.
It noted that, 30,000 Nigerians seeking for jobs would be empowered. “The projects are expected to create over 30,000 temporary jobs during construction and 2,900 direct jobs during operations to complement the ongoing effort of the Bank to support federal government of Nigeria for the implementation of the agriculture transformation agenda, ATA. In addition, both projects are expected to help Nigeria in foreign exchange savings of $65 billion through import substitution, provide revenues for the government in taxes and fees and contribute a large share to the Gross Domestic Product,” it stated.
The AfDB, had in April 2014, said it had disbursed loans and grants totalling $93 billion (about N14.9 trillion) to member countries between 1967 and 2011. The report noted that agriculture and rural development projects accounted for $11.85 billion, representing 12.74 percent. It noted that infrastructure, which included transport, water and sanitation, communications and industry got 44 billion dollars or 47.3 percent of the funds.
“Other beneficiary sectors includes; environment, finance, social and urban development which received the balance of 37.16 billion dollars (40.65 percent) during the period. The Bank recognises the strategic importance of investing in agriculture and food security to promote Africa’s inclusive growth and development agenda. Between 1967 and 2011, the African Development Bank Group approved loans and grants to its regional member countries with commitments amounting to 93.01 billion dollars,” the report said.
New Tariff on Imported Cars
THE federal government on Tuesday, June 24, said there was no going back on the July 1, 2014 deadline set for the commencement of the 70 percent tariff on imported new cars. It, therefore, dismissed the report of a possible extension of the deadline to January 1 next year.
It said only the implementation of the 35 percent levy on imported used cars would be delayed till the end of the year. A statement by the National Automotive Council, NAC, said the July 1 date for new cars “remains sacrosanct and there is no intention whatsoever to subvert or postpone the auto policy.” The statement, which was entitled: ‘FG retains July 1, 2014 date for full implementation of Nigerian Automotive Industry Development Plan’, was signed by Luqman Mamudu, director, policy and planning, NAC.
In November 2013, the federal government had raised the duty and levy payable on imported new and used cars from 20 percent to 70 percent. The policy was aimed at encouraging local production of new vehicles as zero percent was placed on the completely knocked down units required by the local assembly plants.
The government had earlier fixed April 1 for the implementation of the new tariff on both classes of imported vehicles, but later decided to phase the implementation of the policy. Already, the first phase of the policy involving 35 percent duty increase has come into effect. The second phase of 35 percent increase in levy is expected to commence on July 1, 2014.
But there were unconfirmed reports on Monday that the government was considering pushing the commencement date to January next year. The NAC, however, said in the statement that “the implementation of the NAIDP, as published in the Federal Government Official Gazette No. 33 of January, 2014, is still on course.”
Electronic Warehouse Receipt System Coming
THE Nigeria Commodity Exchange, NCX, is set to boost agriculture in the country with the introduction of electronic warehouse receipt system, e-WRS. The formal launch of the e-warehouse system, which is in its pilot stage, will take place on July 10, 2014.
Yusuf Abdurrahmin, managing director, NCX, who disclosed this at a press conference in Lagos, said NCX would be collaborating with Stanbic IBTC Bank, Central Securities Clearing System, CSCS, Bank of Agriculture, BoA, and the Federation of Agricultural Commodity Association of Nigeria, FACAN, on the project while Stanbic IBTC Bank would act as the settlement bank.
Abdulrahman said that the new platform would enable farmers to place their commodities at an NCX-accredited warehouse in different parts of the country and be issued with an electronic receipt stating details such as commodity type, quality and quantity, owner and other relevant information. The depositor, he noted, would have the choice of using the receipt as collateral to obtain bank loans or for trading on the exchange, adding that such depositor could also chose to keep such commodities in the warehouse until their prices stabilize or appreciate.
He also explained that apart from ensuring liquidity on the exchange, the initiative would encourage the provision of standard storage facilities for operators in the agricultural value chain and make the warehouse receipts a prime tool of trade, while facilitating access to finance. “It will also strengthen small-scale farmers and agro-allied businesses while creating jobs and sustainable economic growth,” he said.
Abdulrahman emphasized that an active commodity exchange would significantly help in unlocking Nigeria’s agricultural potential. He described agriculture as a game changer for the country if the sector receives the desired level of commitment by both the private and public sectors.
Also speaking at the event, Sola David-Borha, group chief executive officer, Stanbic IBTC Bank, said: “The commodity exchange and the warehouse receipt system will be instrumental in opening up Nigeria’s farm produce to the global commodity market. The transparency it will engender is crucial in ensuring participation from across the world. And with transparency comes improvements in efficiency and pricing. It also makes it easier for banks to provide financing for operators in the agricultural value chain. Stanbic IBTC considers agriculture to be a very strategic sector for Nigeria. We are deploying our expertise and products towards the development of agriculture business in the country.”
Compiled by Anayo Ezugwu
— Jul. 7, 2014 @ 01:00 GMT
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