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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 industry.

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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.

Our source 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 industry 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 our source 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 policy making, 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 Our source says its 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 our source 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.

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VP Osinbajo calls for provision of capital to grow businesses for long term

The Vice President has stated that the banking sector plays a crucial role in promoting increased & inclusive growth in Nigeria.

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There is need to further deepen the provision of capital that will allow businesses to grow over the long term. This was disclosed by Vice President Yemi Osinbajo during the Bankers Committee on Friday.

He commended the DMBs for their patriotic contributions to sustain growth but called for the need to further deepen the provision of capital that would allow businesses to grow over the long term.

“The banking sector plays a crucial role in promoting increased & inclusive growth in Nigeria. I commend #CBN for the forward-looking support for growth-related initiatives, especially under the economic sustainability plan,” he said.

What you should know

  • On Friday, VP Osinbajo had called for crypto regulation, knowing fully well the role crypto plays in the global financial ecosystem, as he opined that such disruption often made room for progress, according to Nairametrics.
  • Osinbajo also advised the SEC, and Central Bank of Nigeria to create a regulatory road map, while fully appreciating the stance of the CBN, Nigerian SEC, and law enforcement agencies on the possible abuses of crypto assets.
  • The vice president further stressed the important role cryptocurrencies would play in the coming years as they would most likely challenge traditional banking, including reserve banking, in ways the world hadn’t yet imagined. He thus stressed the need for Nigeria to be prepared for such a seismic shift.

 

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Sanwo-Olu says construction work on Fourth Mainland Bridge to start end of 2021

Governor Sanwo-Olu has disclosed that the foundation for the proposed 4th Mainland Bridge would be laid before the end of 2021.

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The Lagos State Governor, Mr Babajide Sanwo-Olu, has revealed that the foundation for the proposed Fourth Mainland Bridge would be laid before the end of the year 2021.

The execution of the bridge is geared towards improving the transport infrastructure and movement across the state.

According to a report from the News Agency of Nigeria (NAN), this disclosure was made by Sanwo-Olu during the 16th Executive/Legislative Parley, with the theme: ”A Consensus Agenda for Rebuilding Lagos”, organised by the Office of Civic Engagement.

He pointed out that the promise to construct the Fourth Mainland Bridge is not a political one.

What the Lagos State Governor is saying

Sanwo-Olu during the interactive session said, ”We did not politically promise Fourth Mainland Bridge but we are going to do Fourth Mainland Bridge.

”With your prayers and by the grace of Almighty God, we shall turn the sod and lay the foundation for the building and construction of that Fourth Mainland Bridge before the end of this year.

”We are on course and I am sure that the 37km ring road is on track, which will change the face of transportation and movement in Lagos,” the governor said.

The governor also disclosed that his administration was on course to complete the Blue Line and Red Line rail projects which were started several years back, saying the project will be completed and trains will move on the two rail lines before the end of his administration.

He said, ”It is a commitment that we have given to Lagosians and it is a commitment that we will see will come to fruition because we have finished the financial closure and we are excited about that project.’

Speaking at the event, the Special Adviser, Office Of Civic Engagement, Princess Aderemi Adebowale, said that the executive and legislature would discuss extensively the theme of the retreat, “A Consensus Agenda for Rebuilding Lagos”.

While saying that the discussion in the next 48 hours would help to fast track the rebuilding of the state, Adebowale said that they would delve deeply into issues such as Youth Leadership Role, Grassroots Development: a catalyst for growth, and Role of Social Media in Nation Building, among others.

What you should know

  • It can be recalled that the Lagos State Government has shortlisted 6 companies for the design, development, construction, operation, and maintenance of the Fourth Mainland Bridge.
  • This followed the government’s issuance of a Request for Qualification (RFQ) in February this year. The 6 companies were said to have completed the technical and financial capacity requirements.
  • Lagos State said it will announce the selection of the next stage in due course, even as the RFQ will be given to the pre-qualified bidders.
  • The Fourth Mainland Bridge is a 37.4km freeway subdivided into three sections namely Island Section, Lagoon Section and Mainland Section. It will commence from Abraham Adesanya Roundabout in Lekki through Ajah and Langbasa areas, crossing the Ado Badore Road before arriving at the Lagoon shoreline.
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Lagos to totally close Third Mainland Bridge again ahead of full reopening

Lagos State Government has announced a 24hour closure of the Third Mainland Bridge from midnight Friday, February 26.

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The Lagos State Government has announced that it will shut down the Third Mainland Bridge for 24 hours from midnight Friday, February 26 to midnight Saturday, February 27.

The expected total closure of the bridge is to enable the contractors to move the equipment used for its rehabilitation and maintenance ahead of the full reopening of both the Oworonshoki and Adeniji bound lanes open to traffic.

The disclosure is contained in a statement issued by the Lagos State Commissioner for Transportation on Wednesday, February 24, 2021.

Oladeinde, therefore, advised motorists approaching the Third Mainland bridge from Ogudu, Alapere and Gbagada to use Ikorodu Road, Jibowu and Yaba, as alternative routes, while Iyana Oworoshoki-bound traffic from Lagos-Island, Iddo, Oyingbo, Adekunle and Yaba are to use Herbert Macaulay Way, Jibowu and Ikorodu Road as alternative routes.

The Commissioner assured that traffic management personnel would be deployed along the affected routes to minimize the impact of the shutdown and address any traffic impediments during the closure.

He was also full of commendation for Lagosians for their cooperation during the prolonged repair works of the bridge and assured that the bridge is now safe for use by everybody.

What you should know

  • The Federal Government had on July 24, 2020, announced the partial shutdown of the Third Mainland Bridge for a period of 6 months for another round of rehabilitation works.
  • This was extended by an extra one month due to disruption caused by the #EndSARS protests last year, when the re-opening date moved to February 15, 2021.
  • The Federal Government later announced that the bridge, which was to reopen on February 15 will no longer be opened as work was expected to commence on the casting of the last expansion joint on the bridge before it will be finally reopened.
  • The 11.8km bridge, which was commissioned in 1990 by the then Military President, Ibrahim Babangida, is the longest of the 3 bridges connecting Lagos Island to the Mainland.
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