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Commodities Exchange Predicts Higher Prices for Maize, Rice, Others

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AFEX Commodities Exchange Ltd. has predicted price increase for maize, paddy rice and cocoa as well as sesame and sorghum by the end of 2022.

Mr David Ibidapo, AFEX Head of Market Data and Research made the forecast known while presenting the 2022 Wet Season Crop Production Report yesterday in Abuja.

He said while there was a forecast of an average decline in production of up to 11.

5 per cent across maize, paddy rice, sorghum and cocoa, they were projected to attract higher prices.

He said maize, which faced a projected decline in production of up to 14 per cent, was projected to have a higher average price point of between N214, 980 per tonne and N220,000 per tonne.

He said the price of maize in 2022 was higher compared to 2021when it sold at N210, 229 per tonne.

Ibidapo said the price of paddy rice, which witnessed close to 22.47 per cent decline in production volumes, was also projected to rise at the end of the last quarter of the year.

He explained that notwithstanding the decline in production of some food commodities, production level for soybean and sesame increased by about 6.5 per cent in 2022.

He said the increased prices and market changes were largely due to flooding, the Russia-Ukraine war, fluctuating exchange rate, and energy crisis, among other factors.

He also said that soybean price was projected to rise by 6 per cent by May 2023.

“Price and market changes across six key commodities have been affected by predictable seasonality effects, activities in the agricultural value chain and macroeconomic as well as global events.

“The projected price hikes across commodities in the report are also tied to incidences of flooding and effects of the Russia-Ukraine war.

“Increases in the prices of fertiliser are another contributory factor.

“Also, access to reliable data is a recurring limitation for agriculture business on the African continent,” Ibidapo said.

The AFEX head of market data and research said the company had consistently advocated for a food balance sheet for the continent to strengthen productivity while enhancing food security.

He said it was important for Nigeria to build food reserves across key staples, spur production and synchronise effort between government and the private sector to position Nigeria against potential global shocks.

Ibidapo said the 2022 crop production report, which was the third edition, surveyed 20,677 farmers as against 9,117 farmers surveyed in 2021.

On AFEX’s contribution to the commodity subsector, Ibidapo said the company was harnessing Africa’s commodities and talents to build shared wealth and prosperity.

He said AFEX was leveraging on its infrastructure and platform investments work outlook to unlock potentials in Africa’s commodities markets.

“Since its inception in 2014, AFEX has developed a viable commodities exchange model for the West African market.

“It is currently on track to impact one million producers, provide services in productivity and access to finance as well as to markets.

“The company is working towards facilitating trade within Africa worth over 500 million dollars in the next five years.

“AFEX’s vision is to be the reference point for commodities in Africa,’’ Ibidapo stressed.

Some major stakeholders in the agricultural value chain such as Mr Oluwatoba Asana, Country Manager OCP Africa Fertilisers Nigeria Ltd. and Mr Sheriff Balogun, President, National Sesame Seed Association of Nigeria were present at the meeting.

They spoke about the need for capacity-building, accurate data, policies, planning, strategic alliances and infrastructure to reposition the agricultural sector and ensure food security in Nigeria. (NAN)

BUSINESS

CBN Unveils New Minimum Capital Requirements For Banks

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Gives Them 24 months To Recapitalise

By Tony Obiechina, Abuja 

 Days after urging Nigerian banks to expedite action on the recapitalisation of their capital base in order to strengthen the financial system, the Central Bank of Nigeria (CBN) on Thursday, March 28, 2024, unveiled new minimum capital requirements for banks, pegging the minimum capital base for commercial banks with international authorisation at N500 Billion.

 

Confirming this in Abuja, on Thursday, March 28, 2024, the Acting Director, Corporate Communications Department, Mrs.

Hakama Sidi Ali said the new minimum capital base for commercial banks with national authorisation is now N200 Billion, while the new requirement for those with regional authorization is N50 Billion.
 

Mrs. Sidi Ali also disclosed that the new minimum capital for merchant banks would be N50 Billion, while the new requirements for non-interest banks with national and regional authorisations are N20 Billion and N10 Billion, respectively. 

A circular signed by the Director, Financial Policy and Regulation Department, Mr. Haruna Mustafa, to all commercial, merchant, and non-interest banks and promoters of proposed banks emphasized that all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026

According to the circular, the move, initially disclosed by the CBN Governor, Olayemi Cardoso, in his address to the Annual Bankers’ Dinner in November 2023, was to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.   

To enable them to meet the minimum capital requirements, the CBN urged banks to consider inject fresh equity capital through private placements, rights issues and/or offers for subscription; Mergers and Acquisitions (M&As); and/or upgrade or downgrade of license authorisation.

Furthermore, the circular disclosed that the minimum capital shall comprise paid-up capital and share premium only. 

It stressed that the new capital requirement shall not be based on the Shareholders’ Fund.

“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement. Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their license authorisation.  

“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” it added.

The CBN circular said the minimum capital requirement for proposed banks shall be paid-up capital, adding that the new minimum capital requirement shall apply to all new applications for banking licenses submitted after April 1, 2024. 

It noted that the CBN would continue to process all pending applications for banking licenses for which a capital deposit had been made and/or an Approval-in-Principle (AIP) had been granted. 

However, it said that the promoters of such proposed banks would make up the difference between the capital deposited with the CBN and the new capital requirement no later than March 31, 2026.

Meanwhile, the CBN said all banks are required to submit an implementation plan (clearly indicating the chosen option(s) for meeting the new capital requirement and various activities involved with their timelines) no later than April 30, 2024. 

The CBN also disclosed that it would l monitor and ensure compliance with the new requirements within the specified timeline.  

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Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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BUSINESS

NASS Seeks Collaboration with WTO on Improving Digital, Marine Economies

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By Eze Okechukwu, Abuja

The Nigerian delegation at the on-going 148th Assembly of the Inter-Parliamentary Union (IPU) in Geneva, Switzerland has sought the collaboration of the World Trade Organisation (WTO) in the area of Digital and Marine economies.

Addressing the WTO media shortly after a courtesy visit to the Director General of the WTO, Dr Ngozi Okonjo Iweala in her office in Geneva on Monday, the leader of the Nigeria delegation, Senator Godswill Akpabio said the delegation were at the WTO to look for areas of collaboration with the organisation in the various sectors of the economy for the overall benefit of Nigerians.

According to him, “We used our attendance at the IPU to pay courtesy visit to one of Nigeria’s very costly export to the world, Dr Ngozi Okonjo Iweala; the Director General of the WTO.

We came to thank her for the job she is doing for the world and thank her staff for supporting and standing by her to succeed. We, in Nigeria are very proud of her.”

“We had discussions on the various developmental programmes of the WTO and we noticed that there were spaces where Nigerians can become major players. We discussed issues affecting trade back home in Nigeria and ways in which the National Assembly can assist in removing barriers, through legislation for the benefit of our people.

 “We also talked about issue of regulations concerning Digital economic contents, illegal finishing along the coastal states of Cross River, Rivers, Akwa Ibom and Bayelsa states. How Nigerian women could benefit from the recent program funded by the organization was also discussed. The establishment of a Digital trade portal, where-in, all trade information could be accessed by our people top our discussion with the WTO. “

Akpabio noted, “The deliberations were fruitful and we are confident that with our support in all of these, Nigerians would be the better for it.”

In his brief remarks, the Deputy Speaker of the House of Representatives, Benjamin Kalu said, ” our best export to the world took her time to bring us up to speed on the various innovations and initiatives of the WTO and what Africa and Nigeria stand to benefit from. We are going back more refreshed because we have seen a space here for Africa to thrive in business and in trade.”

Speaking in the same vein, the WTO chief described the visit of the Senate president and the Deputy Speaker, to her office as “a huge honour. We were able to talk on those things we are doing at the WTO that would help make a material difference for Nigerians.

“We spoke of recent program that we launched in some development program from the standards and trade facilities to help in improving sanitary and vital sanitary standards for some of the crops in Nigeria, so that it helps in diversifying the economy to even fisheries and illegal mining of the waters of Nigeria.”

According to her, “A lot of things on the table have already been discussed. I am honoured by this visit and I am home-sick.”

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