Economy
Africa Must Use Agriculture to Propel Industrialisation—Adesina
By Modupe Gbadeyanka
President of the African Development Bank (AfDB), Mr Akinwumi Adesina, has charged African leaders to put agriculture at the forefront of the continent’s industrialization.
Mr Adesina made this known last Wednesday when the AfDB launched its 2018 African Economic Outlook in Abidjan, Côte d’Ivoire.
The bank’s chief said infrastructure projects were among the most profitable investments any society can make as they “significantly contribute to, propel, and sustain a country’s economic growth. Infrastructure, when well-managed, provides the financial resources to do everything else.”
Noting that economic diversification was key to resolving many of the continent’s difficulties, he urged African governments to encourage a shift toward labour-intensive industries, especially in rural areas where 70 percent of the continent’s population resides.
“Agriculture must be at the forefront of Africa’s industrialization,” he said, adding that integrated power and adequate transport infrastructure would facilitate economic integration, support agricultural value chain development and economies of scale which drive industrialization.
He reminded the audience of policy-makers and members of the diplomatic corps in Côte d’Ivoire that economic diversification via industrialization with tangible investment in human capital will enable the continent’s rapidly growing youth population to successfully transition to productive technology-based sectors.
Mr Adesina also highlighted the relatively unknown win-win situation that Africa’s industrialization can generate within the developed world, citing data from the report, which notes that “increasing the share of manufacturing in GDP in Africa (and other Less Developing Countries) could boost investment in the G20 by about $485 billion and household consumption by about $1.4 trillion.”
The Bank President highlighted various innovative ways in which African countries can generate capital for infrastructure development and what the Bank is doing through its ambitious High 5 development agenda to address the issues raised in the report.
He announced that the Bank would organise the Africa Investment Forum on November 7-8, 2018 in Johannesburg, South Africa, to mobilise funds for infrastructure development, to bridge an estimated funding gap of $130-$170 billion a year, up from previous estimates of $100 billion per year.
New infrastructure financing gap estimates and innovative ways through which African countries can raise funds for infrastructure development are among the highlights of the 2018 edition of the report, which was launched at the Bank’s headquarters for the first time in the publication’s 15-year history.
The African Economic Outlook was first published in 2003 and launched mostly in various African capitals outside the Bank’s headquarters in May each year.
In his remarks, Célestin Monga, the Bank’s Chief Economist and Vice-President for Economic Governance and Knowledge Management, said the African Economic Outlook has become the flagship report for the African Development Bank, providing data and reference material on Africa’s development that are of interest to researchers, investors, civil society organizations, development partners and the media.
This year’s edition focuses on macroeconomic development and structural changes in Africa, and outlines economic prospects for 2018. The report emphasizes the need to develop Africa’s infrastructure, and recommends new strategies and innovative financing instruments for countries to consider, depending on levels of development and specific circumstances.
Abebe Shimeles, Acting Director, Macroeconomic Policy, Forecasting and Research, said the Bank will publish Regional Economic Outlooks for Africa’s five sub-regions. The self-contained, independent reports, to be released at the Bank’s Annual Meetings in May 2018, will focus on priority areas of concern for each sub-region and provide analysis of the economic and social landscape, among other key issues.
Participants at the launch session, moderated by the Bank’s Director of Communications and External Relations, Victor Oladokun, included members of the diplomatic community in Côte d’Ivoire, representatives of international organisations and multilateral development banks, civil society and the media.
By Adedapo Adesanya
The Manufacturers Association of Nigeria (MAN) is seeking protection from the federal government amid rising concerns over the impact of escalating Middle East tensions on Nigeria’s manufacturing sector, particularly risks linked to disrupted global shipping routes, volatile energy markets, and supply chain bottlenecks.
MAN noted, “Its vigilance regarding the escalating military tensions involving the United States, Israel, and Iran. These events have significant implications for the global macroeconomic landscape, which can indirectly impact Nigeria.”
The director-general of MAN, Mr Segun Ajayi-Kadir, expressed that this situation arises at a pivotal moment when Nigeria has seen its annual inflation rate positively ease to 15.10 per cent, and manufacturing capacity utilisation has begun to exceed the 60 per cent mark, saying, however, the current geopolitical turbulence poses challenges that require careful navigation to protect the economic progress achieved.
“Although these conflicts are occurring far from our shores, their economic consequences may directly influence the Nigerian economy.
“We are particularly attentive to issues surrounding global shipping disruptions, fluctuating energy markets, and potential supply chain bottlenecks that could challenge local production,” Ajayi-Kadir stated.
Mr Ajayi-Kadir further explained that the recent hostilities in the Middle East are reshaping the global energy and logistics environment.
“With critical disruptions in the Strait of Hormuz, the global markets have become unsettled, reflected in rising Brent crude prices exceeding $84.50 per barrel, and increased global freight and war-risk insurance premiums as vessels seek safer routes,” he stated.
For Nigerian manufacturers, MAN DG added that the implications of these developments are immediate and significant, increasing production costs, saying that historically, disruptions in the U.S. and the Middle East have reverberated throughout the global economy, and Nigeria is no exception.
He noted that “while a rise in global oil prices could theoretically benefit Nigeria by bolstering foreign exchange reserves and contributing to the stability of the Naira, the current reality presents a complex challenge. Nigeria’s domestic crude production hovers around 1.3 to 1.4 million barrels per day due to ongoing structural challenges, limiting the ability to fully leverage potential gains.”
He disclosed that in terms of trade relations, the United States remains one of Nigeria’s most vital partners, stating that given the existing conflict, disruptions in this crucial trade relationship could lead to increased costs for global freight forwarding and longer lead times for imported raw materials, potentially resulting in imported inflation.
According to him, the manufacturing sector is poised to face a variety of immediate and complex challenges, including rising energy costs, which are particularly relevant given that manufacturers depend heavily on gas and diesel for effective operations.
“Additionally, increasing freight costs and longer shipping times are making it more expensive to procure raw materials. Furthermore, heightened costs for essential goods could diminish consumer purchasing power, presenting manufacturers with the challenge of rising production costs amid stagnant or declining sales.”
In identifying the sectors most likely to be affected, MAN emphasised that the impact of global conflicts is not uniformly distributed, adding that “while the entire real sector is likely to feel the pressure, specific groups such as the Chemical and Pharmaceuticals Sector and the Basic Metals, Iron, and Steel Sector may encounter unique challenges.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited witnessed 47 price gainers last week, marginally lower than the 48 recorded in the preceding week.
This occurred as the All-Share Index (ASI) and the market capitalisation depreciated by 0.12 per cent on a week-on-week basis to 200,913.06 points and N128.969 trillion apiece due to profit-taking.
Similarly, all other indices finished lower except the main board, insurance, AFR Div Yield, energy, Lotus II, growth and commodity indices, which appreciated by 1.53 per cent, 2.22 per cent, 1.36 per cent, 1.93 per cent, 1.61 per cent, 2.31 per cent and 2.77 per cent, respectively, while the sovereign bond index closed flat.
Business Post reports that in the week, 45 equities shed weight compared with 43 equities in the previous week, while 56 stocks closed flat versus 57 stocks a week earlier.
The best-performing stock last week was Zichis, which gained 60.72 per cent to trade at N13.79. Premier Paints appreciated by 60.25 per cent to N37.50, John Holt rose by 59.92 per cent to N18.95, Legend Internet grew by 25.00 per cent to N7.50, and McNichols increased by 20.65 per cent to N7.42.
As for the worst-performing stock for the week, it was Livestock Feeds, which declined by 11.73 per cent to N7.15, Fidson depreciated by 9.97 per cent to N94.85, Cadbury Nigeria dropped 9.94 per cent to N63.00, Austin Laz stumbled by 9.89 per cent to N4.01, and Learn Africa lost 9.09 per cent to settle at N8.50.
A look at the activity chart showed that 3.950 billion shares worth N201.312 billion exchanged hands in 359,642 deals in the five-day trading week, in contrast to the 8.761 billion shares valued at N267.253 billion traded in 193,473 deals a week earlier.
Financial stocks dominated with 2.881 billion units sold for N102.259 billion traded in 139,093 deals, contributing 72.94 per cent and 50.80 per cent to the total trading volume and value apiece.
ICT equities transacted 230.539 million units worth N45.172 billion in 52,669 deals, and agriculture shares traded 191.927 million units valued at N6.626 billion in 16,471 deals.
Wema Bank, Access Holdings, and UBA were the busiest, with 1.448 billion units worth N43.191 billion in 28,436 deals, contributing 36.65 per cent and 21.45 per cent to the total trading volume and value, respectively.
By Dipo Olowookere
Nigerian stocks shrank by 0.02 per cent as a result of renewed selling pressure, after the consumer goods index crumbled by 0.89 per cent, and the banking space contracted by 0.23 per cent.
Business Post reports that the Nigerian Exchange (NGX) Limited weakened yesterday despite the energy sector closing 1.78 per cent higher, the insurance segment increasing by 0.31 per cent, and the industrial goods counter closing flat.
The All-Share Index (ASI) eased by 44.83 points to 200,913.06 points from 200,957.89 points, and the market capitalisation decreased by N29 billion to N128.969 trillion from N128.998 trillion.
eTranzact lost 10.00 per cent to trade at N20.70, Abbey Mortgage Bank declined by 10.00 per cent to N9.90, Cadbury Nigeria retreated by 10.00 per cent to N63.00, Eterna also fell by 10.00 per cent to N33.75, and DAAR Communications dipped by 9.50 per cent to N1.81.
Conversely, Premier Paints appreciated by 9.97 per cent to N37.50, Zichis gained 9.97 per cent to trade at N13.79, McNichols improved by 9.93 per cent to N7.42, John Holt chalked up 9.86 per cent to close at N18.95, and Trans Nationwide Express went up by 9.75 per cent to N2.59.
On the last day of the week, 595.2 million equities valued at N24.5 billion were transacted in 43,440 deals versus the 678.1 million equities worth N33.1 billion traded in 42,222 deals in the previous session.
This showed an improvement in the number of deals by 2.89 per cent, and a cut in the trading volume and value by 12.22 per cent and 25.98 per cent, respectively.
Wema Bank ended the day as the busiest stock after a turnover of 131.5 million units worth N3.5 billion, Legend Internet traded 41.6 million units valued at N339.2 million, Zichis sold 35.2 million units for N485.6 million, Access Holdings exchanged 29.4 million units worth N764.8 million, and Japaul transacted 21.5 million units valued at N74.6 million.
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