Monday, December 12, 2016
The price of bitcoin hit two major milestones today, reaching a new 2016 high and rising to its most elevated level since February 2014.
At press time, bitcoin's price rose to a high of $788.49, CoinDesk USD Bitcoin Price Index (BPI) figures reveal, the highest price observed in 34 months.
The figure not only surpassed the previous 2016 high of $781.31, but also represented bitcoin’s most elevated value since this summer, when expectations were high about the digital currency's upcoming decline in rewards.
However, with today's movements, bitcoin has finally broken through after weeks of flirting with its previous annual high. The digital currency neared $781 several times this month, but up until now, has been unable to surpass it.
Bitcoin prices came within roughly $2 of this previous high yesterday, and then broke through it at 01:45 UTC today, BPI figures reveal. After surpassing this level, the digital currency generated additional gains.
Now that bitcoin prices has surpassed the previous high of $781.31, this price could become a new support level for the digital currency.
Whether this support materializes or not, bitcoin prices have generated very strong returns so far this year, rising more than 80% from roughly $430 to more than $780.
This piece is not intended to provide, and should not be taken as, investment advice
Source Coindesk.
Monday, October 10, 2016
The aggressive manner in which Alhaji Aliko Dangote is investing in local rice production and the effort of government in enhancing the domestic production of rice, Nigeria may soon return to the international market as a net-exporter of rice.
Years ago, Nigeria was among the top rice producers until an aversion for home-grown rice sets in. This has turned Nigeria to the second largest importer of rice in the world, buying at least five million metric tons per year from exporting countries like China and Thailand. Yet Nigeria’s fertile land and rich agro-climatic conditions could easily produce rice to feed the entire country and generate surplus for the region
The inclusion of rice on the list of 41 items excluded from accessing foreign exchange (FOREX) from the official window as well as the general issues with sourcing of FOREX has led to a drop in rice supply to the domestic market and a spike in prices.
Considering that the FGN’s set minimum wage currently stands at N18,000 per month, a bag of rice currently priced at between N18,000 to N19,000 per bag is almost not affordable to the average household.
Despite the ban on rice imports through land borders, there has been increased smuggling.
The Nigeria Customs Service has recorded a pick-up in seizures since January 2016.
The Federal Ministry of Agriculture and Rural Development (FMARD) has expressed its commitment to improving rice productivity. Local rice production has been projected to hit 2.7 mmt in 2017.
On the public- private partnership sphere, Dangote inaugurated its 8,000-hectare rice out-growers’ scheme in Hadejia, Jigawa state early this year, when he distributed rice seedlings to farmers. The scheme is said to help reduce the level of Nigeria’s imports and potentially provide direct and indirect jobs to about 10, 000 Nigerians.
Dangote Industries Limited (DIL) also recently signed a Memorandum of Understanding (MoU) with the ministry of Agriculture and Rural Development (FMARD) to invest $1 billion on establishment of fully integrated rice production and processing operations across Nigeria.
Farmlands in Edo, Jigawa, Kebbi, Kwara, and Niger states totalling 150,000 hectares have been penciled down for the commercial production of rice paddy.
Rice is one of the viable investments in agriculture, as a high yield crop, the return on investment for rice farming is high and it takes just four months to plant and harvest rice.
Starting with 20,000 hectares of rice cultivation under scheme known as outgrowers, to be expanded to cover 800, 000 hectares over the next three years, the president of Dangote Group, Alhaji Aliko Dangote said time is now to turn to agriculture to save the nation’s economy.
The business mogul commenced the scheme with the distribution of treated rice seedling for planting to some 5,000 farmers expected to participate in the scheme.
The Outgrower programme in Jigawa state is expected to create more than 10,000 direct and indirect jobs to the host communities.”
Aside the outgrowers aspect of the investment, he explained, Dangote Rice is planning to plant approximately 150,000ha of long grain white rice and produce near one million tons of high quality par boiled white rice for sale into the Nigerian market.
“Our internal policy within Dangote Rice is to procure 30 per cent of our rice production from local farmers who will be developed into outgrower groups. These outgrowers will be simultaneously developed alongside our commercial farming operations.” he said.
The business mogul justified his investment in rice cultivation pointing out that the situation the country has found itself needs a reversal, saying “Nigeria spends nearly $1.8 billion per annum importing approximately 3.2 million MT of rice to feed its population. These are dollars that could be used on more impactful social development interventions if they were not needed for food imports.”
During the rice seedling distribution by the company, the minister of state for Agriculture, Senator Heneiken Lokpobiri lauded the initiative of Dangote, saying intervention in the government efforts at providing food security for the citizenry, creating jobs and reducing dependency on food importation are being boosted.
While expressing the government readiness to provide all the needed support to make the Dangote Rice Outgrowers Scheme a success, the minister said the government is putting in place a strategy that will make farmers have greater access to farm implements to help them produce with ease.
Also, the special adviser to Dangote on Rice and Coordinator of the Outgrowers Scheme, Mr. Lulu Carlos explained that 6.1 mmt of rice is consumed annually but not more than 2.6 million metric tons are produced locally leaving the rest to importation.
Lulu said, “We are happy to start today the partnership with the first Outgrowers bloc of 200 hectares, shared among eight communities.”
He pointed out that the same project was applied by Brazil, which transformed the country from a net importer of rice in the year 2000 to a net exporter in the year of 2009, saying “This was achieved through a big outgrower scheme in the rice region, which, today involves thousands of independent farmers responsible for 80 per cent of the 12 million tons locally produced rice and a small number of large commercial farms supplying the remaining 20 per cent.”
Jigawa State governor, Alhaji Badaru Muhammed Abubakar thanked the Dangote Rice Limited for choosing Jigawa as the pilot state for the project.
He pledged the readiness of his administration to provide all necessary support to the project.
With the federal government rice production scheme, stakeholders have expressed hope that the scheme will stop the massive importation of rice in Nigeria, in the next three years.
Apart from large entities like Dangote, there has been increased participation by small holder rice farmers. However, access to credit still remains a challenge.
There are other areas within the rice value chain which are largely untapped, they include processing, storage, packaging and distribution. Insufficient supply chain integration was highlighted as a core issue within the rice segment by the federal government.
While the supply deficit is huge, closing the gap could be accelerated through increased private sector participation. However the onus is on the government to create an enabling environment. Excluding the job creation potential, this would also ease pressure on the country’s import bill.
Source naija247news.
Sunday, October 9, 2016
Participants in the ongoing federal government Youth Entrepreneur Support Programme (YES-P) in collaboration with Bank of Industry (BoI) have cried out for a more feasible loan conditions in order to be able to access the 5 million naira loan en marked for the funding of their business ideas.
According to some participants interviewed by our correspondents, after going through a three months rigorous online training and another one week intensive in-class training, the Bank of Industry has presented difficult loan conditions which will effectively make it difficult to get the loan.
The YES-P participants according to the loan terms will have to relinquish two certificates including their degree certificates all through the loan term as a collateral security.
The loan also comes with a 9% interest rate that must be paid within a term of five years.
Most of the would be beneficiary of the scheme are already pulling out as a result of their inability to provide loan guarantors, according to a source in the bank, very few participants, less than 5% have been able to meet the loan conditions.
Some of the participants also complained that the bank will mainly support their business through direct purchase of equipment and other capital assets while releasing only a maximum of 50% of the fund as working capital.
According to sources, this arrangement only favors agriculture but disadvantage for those investing in ICT, intellectual properties and those whose business is offering of services.
The YES Programme is an initiative of the federal government and the Bank of Industry to tackling unemployment in the country which is expected to generate 36,000 jobs for the nation. The YES Programme is also part of the federal government’s drive and wealth creation programme which is aimed at addressing the malaise of youth unemployment.
The programme is targeted at young aspiring entrepreneurs within the age range of 18-35 years, who have a minimum educational qualification of Ordinary National Diploma (OND) or its equivalents.
Considering the hurdles standing in the way of these entrepreneurs, it is highly unlikely that the objective of this programme will be accomplished except the federal government steps in and help advice the bank of industry to soften the loan conditions.
Tuesday, September 27, 2016
The Dangote Industries Limited 17 billion-dollar refinery project will create over 300,000 direct and indirect jobs by the first quarter of 2019, the Chief Operating Officer, Mr Olakunle Alake, has said. Alake made the disclosure in an interview with the News Agency of Nigeria (NAN) in Lagos on Monday, adding that the refinery, petrochemicals and fertiliser plants were in one location.
He said the project would be the single largest stream in the world.
“The refinery and fertiliser projects will create job opportunities for the communities and Nigerians when it becomes operational. “The refinery will have a refining capacity of about 650,000 barrels of crude a day,’’ he said. Alake said the project would force down the price of Premium Motor Spirit (petrol) in the country and save money spent on importation. He said that projects such as these would optimise government revenue and wean Nigeria from relying solely on oil. According to him, the best way to diversify Nigeria’s economy is through agriculture and the fertiliser plant is in line with that goal.
“It will also generate five billion dollars forex earnings from savings and another 5.5 billion dollars export earnings,’’ he said. Alake gave assurance that there would be markets for the refined products, saying that only three countries in Africa had effective and functional refineries, while others imported. Alake said the projects would help the country save five billion dollars on oil importation when it became operational in 2019.
“By the time we complete this project, there will be opportunity to take on agriculture and say bye to poverty because there will be jobs; no sector has more job potential than agriculture. “Though the project is an ambitious one but when completed it will give Nigeria a new economic direction in its quest for economic diversification.’’ He said excess products would be exported to give Nigeria the much needed foreign exchange.
“That is when diversification starts,’’ he said. Alake said, however, that access to foreign exchange posed serious challenges to the projects. “We aim to complete the projects within the time frame to assist in easing the forex problem.
“We appeal to the Federal Government to support these private initiatives by providing funding for the projects. “However, government through the Bank of Industry schemes has given us a credit facility of N50 billion to develop the fertiliser plant. “We have also gotten another N75 billion approval for the refinery, which we have not yet accessed,’’ Alake said.
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Thursday, September 22, 2016
Wednesday, September 21, 2016
The US Chamber of Commerce has named Aliko Dangote, Africa’s most successful businessman, as the co-chair of its US-Africa Business Center.
Dangote will serve alongside Jay Ireland, president and CEO of GE Africa, as a leader for the US-Africa Business Center Board of Directors.
“We are honored to have Aliko Dangote on board to help guide the business communities’ efforts in pursuit of a new era of unprecedented growth between the United States and Africa,” said Scott Eisner, president of the U.S.-Africa Business Center. “The future of job creation lies in the hearts and minds of business leaders and their enterprises across Africa. We are fortunate to have an opportunity to tap into the expertise of Dangote and our board to ensure that U.S. companies have strong partners across Africa and can provide access to African companies interested in the U.S. market.”
One of Africa’s leading industrialists, Dangote is a member of several national and foreign organisations where he devotes his resources to contribute to the growth and development of African society. In October 2013, he was named by Forbes as the Most Powerful Man in Africa.
“Taking on this role with the U.S. Chamber sends a clear message across Africa: American companies no longer see Africa as a stepping stone to global trade, but rather, as the future of trade,” said Dangote. “Africa has emerged as one of the most promising growth regions in the world thanks to its vast array of industries, natural resources, and services. Continued and sustainable growth lies in the ability to improve regional integration, which will, in turn, help create a business environment that is more attractive to international investors.
“I believe strongly in Africa’s potential, and we are proud that the U.S.-Africa Business Center will serve as the apex organization to promote trade and investment between the United States and the vibrant economies across the continent,” added Dangote.
The US Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
CNBCAfrica
Tuesday, September 20, 2016
The Federal Government, last week, announced a number of stimulus packages to steer the economy back to growth. To complement government’s effort, experts offer tips on how to deal with the nauseating situation. ABDULWAHAB ISA reports
Top officers of government at the centre are nervous and working round the clock, consulting stakeholders on best ways to lift the economy from the present mess. The rate of engagement and consultations has been stepped up recently, following official confirmation by the National Bureau of Statistics (NBS), which in its second quarter 2016 economy report, put the country’s Gross Domestic Product (GDP) at -2.06 per cent.
The NBS report aligned with an earlier one released by the International Monetary Fund (IMF) revealing that Nigeria’s economy was posting negative growth. According to NBS, the nation’s GDP fell by 1.70 per cent points from the growth rate of –0.36 per cent recorded in the preceding quarter, and also lowered by 4.41 per cent points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015.
From the foregoing reports by NBS and IMF respectively, the Nigerian economy is in full recession. Government officials and private sector players have been proffering solutions to get the economy out of recession. Suggestions have been made to t government on the need to re-compose the Economic Management Team (EMT) to achieve efficient and productive economy.
Admitting recession
In the past, there were instances the government referred to published report on economy as bias and not reflective of the actual situation on ground. Certainly, government never faulted the recent one on GDP decline and previous report by the IMF. It concurred with the findings of NBS, admitting that the economy was in silent mode. However, it gave assurance that the experience would be short lived.
Speaking last week in Abuja, Minister of Finance, Mrs. Kemi Adeosun, said the current economic recession plaguing the nation would not be a prolonged one. She said the government had put up a strategic plan to halt the recession and return the economy to productive path.
She said, “We have a strategic plan that will take us out of the recession we have found ourselves in; we want to make sure the recession is as short as possible because we do not want a prolonged recession.
From what we are looking at, we do not think that it will be a prolonged recession; we think that some of the initiatives we are working on will now begin to bear fruits. We are on course and are confident that the plan we have put together will work and put the economy back on track. It is a long term plan that will reposition the economy so that we do not go into this boom and burst circles driven by the oil price. The economy has to be more resilient so that we do not find ourselves back where we are now.’’
Though the minister was dodgy, on when the recession would end, she said the fact that there were measures in place was enough indication that the end of the recession had begun and that Nigeria would come out stronger.
Reflating economy
Based on the expectation the government, last week, announced new measures it would be putting in place to spur major economic activities in the economy. Unveiling the details on behalf of the government, Adeosun announced that an additional N350 billion earmarked for capital projects in the 2016 budget would be released any moment. The payment of N5,000 to the vulnerable poor and the feeding scheme for primary school pupils in public schools will follow this month. The release of the additional N350 billion will bring the total capital releases made by the government to N760 billion out of N1.8 trillion capital component in the 2016 budget.
“What the government wants to do is to step in and begin to spend and push more money into the economy and then get things moving again. Since the budget was passed in May, we have released cash-backed fully with N420 billion being capital releases. As we speak now, we are about releasing another N350 billion. Of the sectors we spent the money on, of course, the largest had been power, works and housing.
Quite a lot has gone to defence, because we need to rebuild the credibility of our army to continue in their efforts in the new phase; also interior and transport,” she said. “There will also be the funding of about N60 billion in the social intervention programme and that’s very important in terms of putting money into people’s pockets. Those are the programmes that we really cash-backed.
The N5,000 to some of the poorest and most vulnerable, the home school feeding programme, which is very important. That will also generate economic activities in a lot of our local governments with women and maybe men cooking for the children. The graduates that will be going into primary schools as teachers so they will begin to get salaries/ stipends at the end of the month,” said the minister. The government also gave assurance that the external borrowing it hopes to source from planned $1 billion Eurobond, would be deployed in key capital projects . Adeosun said: “We are raising money.
The Eurobonds capital raising is on. We are about to appoint our advisers. We are raising additional $1billion. Two weeks ago, we approved the external borrowing plan. That was very important because we said we would be borrowing the cheapest money first.
We have approved that plan from the World Bank, the ADfB, with interest rates as low as 1.5 per cent with tenor as long as 40 years to intervene in some specific areas, which include agriculture, education, health, rebuilding of the North East and railway projects, which are very key to what we are doing.” She also said the ministry was working with the Nigerian National Petroleum Corporation (NNPC) to get out of the Joint Venture cash call as this was affecting funds available for government projects.
“This month, for example, from the Federation Accounts Allocation Committee, we only got N41 bn from oil. We had to use N110 bn to fund cash calls. If we had that money, we could have channelled it into the economy. We are working with the Ministry of Petroleum Resources and the NNPC to get out of the cash calls. That is the long term plan; to allow those joint venture to borrow money that they need, rather than taking money from the Federation Account and that will improve the money in circulation,” She said.
Experts’ concern
Experts across divides – from academia to technocrats – have reacted to government’s strategic rescue plan announced last week by the finance minister. Speaking with New Telegraph, professor of Economics and former Special Adviser on economic matters to former Vice- President Atiku Abubakar, Mike Kwanashe, said government’s strategic plan was in order for a country passing through a recession.
“Don’t forget that recession is a policy issue and the step government has announced to reflate the economy is a good one. It’s a standard practice usually deployed to rescue an economy experiencing recession.
The authority rises to the challenge by pumping money into the system, to stimulate economic activities. But the sequence has to be matched, taking cognisance of aggregate demand and aggregate spending. Pumping money will spur more activities in the economy,” he said. The former head, Economics department at Ahmadu Bello University said that to rescue an economyin recess, it requires a combination of short and long term measures.
He cautioned the government to be wary of channeling its intervention funds on imports. “Once you have economy that is not producing like ours, the money pumped into economy may exit to support import without achieving its long term impact. The best way is to use such funds to stimulate local production, but again this depends on utilisation of the allocation by the MDAs.
“If MDAs utilise the allocation to prop up local production, which leaves lasting positive impact, the economy will recover; but if the funds were used to import goods, it will not solve the situation,” he said. In his response, Dr. Uche Uwaleke, Head of Banking & Finance Department, Nassarawa State University, said the planned release of N350 billion and other measures were in order. “There is no doubt that the injection of N350 billion will boost aggregate demand and help the process of restarting growth of the Nigerian economy.
However, for desired impact to be felt, such money should be channeled more to employment generating activities such as agriculture, infrastructure and solid minerals. Equally vital is ensuring preference for local contractors over foreign firms in the award of contracts.
The major challenge I see with the conditional cash transfer scheme is identifying genuine beneficiaries in a country that lacks the requisite database of the core poor and vulnerable people.
This seeming loophole creates opportunities for corruption. So, in my view, the scheme should not be implemented in a hurry.
Conclusion
Instructively, the ball is in government’s court. With the instruments (monetary and fiscal) for controlling the economy effectively put to proper coordination, the current recession ought not to last longer. To declare that Nigerians are hard hit and suffocating from hardship is understating the obvious
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