Economy
Border Closure Will Drive Local Production, Stifle Smuggling–Emefiele
By Adedapo Adesanya
Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has reacted to the controversies that have followed the decision of the federal government to close land borders with neighbouring countries as a means of encouraging local production and stifle the activities of smugglers.
This has brought a lot of criticisms and complaints from traders who rely on importation and dismissed fears that the borders would be shut for a longtime.
However, the CBN chief, who met President Muhammadu Buhari before his scheduled departure to Saudi Arabia on Monday, told journalists that the closure stemmed from the need to boost rice production and encourage poultry farming in the country.
According to Mr Emefiele, there was a syndicate operating among neighbouring countries which dump processed foods and other goods in Nigeria, thereby stifling economic activities in the agricultural value chain.
Business Post had reported last month that the federal government had ordered the closure of all land borders into Nigeria due to the prohibited activities of smugglers.
“You will all recall that in November 2015, President Muhammadu Buhari, the central bank and some state governors went to Kebbi State to launch the wet season rice farming.
“Since then, we have seen an astronomical growth in the number of farmers who have been going into rice farming and our paddy production has gone up also quite exponentially.
“Between 2015 and also now, we have also seen an astronomical rise in the number of companies, corporate organisations and individuals that are setting up mills, integrated mills, and even small mills in the various areas,” the apex bank boss said.
Mr Emefiele added that the CBN in partnership with the Federal Ministry of Agriculture and Rural Development have put in place measures that does not only encourage the production of rice in Nigeria but also funding farmers by giving them loans to buy seedlings, fertilisers, or some of the herbicides needed for rice cultivation.
He also used the opportunity to lay a warning to parties involved in the illegal importation of banned goods into the country, “You will all recall that we have been embarking on a programme where we are saying if you are involved in the business of smuggling or dumping of rice in the country, we’ll close your account in the banking industry.”
Reiterating the bank’s commitment, he added, “About two weeks before the border closure, the chairman of the Rice Processors Association – incidentally he owns Umza Rice in Kano – called me and said that all the rice millers and processors are carrying in their warehouses nothing less than 25,000 metric tons of milled rice.
“That this rice has been unsold because of the smuggling and dumping of rice through Republic of Benin and other border posts that we have in the country, and that he would want us to do something about it.
“Secondly, we also have members of the Poultry Association of Nigeria who also complained that they have thousands of crates of eggs that they could not sell together with even some of the processed chickens that they could not sell, also arising from the problem of smuggling and dumping of poultry products in Nigeria.
“I was told also that after some meetings that were held in addition to those engagements that we (CBN) also held with the president, the border was closed subsequently.
“A week after the borders were closed, the same rice millers association called to tell us that all the rice that they had in their warehouses had all been sold.
“Indeed, a lot of people have been depositing money in their accounts and they have even been telling them ‘please, hold on, don’t even pay money yet until we finish processing your rice’.
“The Poultry Associations have also come to say that they have sold all their eggs, they have sold all their processed chickens, and that demand is rising.
He said that poultry and rice were the best examples of products that showed that the border closure were beneficial to the economy.
“The benefit is that it has helped to create jobs for our people. It has helped to bring our integrated rice milling that we have in the country back into business, and they are making money.
“Our rural communities are bubbling because there are activities, because rice farmers are able to sell their paddy.
“The poultry business is also doing well, and also maize farmers who produce maize from which feeds are produced are also doing business.
“These are the benefits. We are not saying that the borders should be closed in perpetuity, but that before the borders are reopened, there must be concrete engagements with countries that are involved in using their ports and countries as landing ports for bringing in goods that are smuggled into Nigeria.
“That engagement must be held so that we’ll agree on the basis under which: what are the kinds of products that they can land in their countries, because if those products they land in their countries are meant for their own local consumption, it is understandable.
“But the fact that those products are landed in their countries and then transshipped into Nigeria is something that I am sure you will all agree as Nigerians we should not allow to happen, because it undermines our economic policy, it undermines our own desire to make sure that industries are alive and jobs are created in Nigeria.” He added.
By Adedapo Adesanya
Brent futures climbed $1.06 or 1.3 per cent to $83.55 a barrel on Friday amid ongoing uncertainty about the negotiations in progress that determine control of and reopening of the key shipping artery of the Strait of Hormuz.
In the same vein, the US West Texas Intermediate (WTI) futures finished at $78.18 a barrel after it chalked up 89 cents or 1.15 per cent.
Iran is reviewing a bill to ban American and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passed before the war began at the end of February.
Market analysts noted that while this week’s signals on a potential deal have sent a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched.
Part of the question being asked is whether the Iran-Oman agreement would allow a US-flagged vessel to transit the Strait of Hormuz or allow a vessel headed for an American port to go through.
Shipping through Hormuz remains heavily constrained as Middle East oil production is still well below pre-war levels while attacks on commercial vessels have continued even as negotiators discuss possible arrangements for the waterway.
Some also said that this week’s developments have signalled that hostilities between Iran and the US are not yet over. This is because the proposed deal is not easily workable because of sanctions and restrictive insurance clauses on any payments by the US government.
Iran is seeking fees of between 5 per cent and 7 per cent of the price of cargoes from ships using the strait, while Oman is discussing fees of about 3 per cent, while the Donald Trump administration wants no fees at all.
Citi has raised its third-quarter Brent crude forecast to $80 per barrel from $75 as the war drags on and repeated attempts at a deal fail to restore normal oil flows through the strait.
The bank still expects the conflict to be resolved, but the five-month war has lasted longer than Citi anticipated and kept more geopolitical risk in crude prices. Citi left its fourth-quarter Brent forecast unchanged at $70 per barrel and still sees the benchmark averaging $65 in 2027.
By Adedapo Adesanya
Nigerian businessman and chief executive of Dangote Industries Limited, Mr Aliko Dangote, has unveiled plans for a new phase of investments and acquisitions as the conglomerate pushes towards its target of generating $100 billion in annual revenue by 2030.
Mr Dangote disclosed this while receiving a delegation of senior executives from global investment banking and financial services firm Goldman Sachs, led by co-chief executive of Goldman Sachs International and Global Co-Head of Investment Banking, Mr Anthony Gutman, during a tour of the Dangote Petroleum Refinery & Petrochemicals and Dangote Fertiliser Limited complex in Lagos.
Speaking after the visit, Mr Dangote said the refinery and associated industrial facilities underscore the transformative impact of long-term investment in Africa, stressing that the group’s ambitions extend beyond its current strategic plan.
“No matter how we try to explain what we have built, you cannot fully appreciate it until you see it. But this is only the beginning. We need to look beyond 2030.
“The next phase of our journey will include new investments and acquisitions as we continue to scale the business,” he said.
He added that detailed internal modelling had reinforced management’s confidence that the Group’s target of generating $100 billion in annual revenue by 2030 was achievable.
According to him, the projections were based on conservative assumptions and had strengthened the company’s conviction to pursue an even more ambitious long-term growth strategy.
Mr Dangote also revealed that the strong participation of employees in the refinery’s recent private placement reflected growing internal confidence in the company’s long-term strategy and future prospects.
The Goldman Sachs delegation, after an extensive tour of the 700,000 barrels-per-day refinery, described the project as an extraordinary achievement.
“It is extraordinary what Mr Dangote and the whole organisation have achieved. The ambition, the scale of the project, the quality of the project and the culture of the people is very impressive,” the executives said.
According to a statement issued by Dangote Group on Friday, the delegation was led by Mr Anthony Gutman and included Mr Adib N. Zouein, Co-Head of EMEA Emerging Markets Regional Sales and Head of the Middle East and North Africa region for Global Banking & Markets Public; Mr Ryad Yousuf, Global Head of FICC Sales Strats and Structuring; and Mr Jimi Adesanya, Head of Sub-Saharan Africa Sales (excluding South Africa).
The visitors were received by Dangote; Group Vice President, Oil & Gas, Mr Devakumar Edwin; Managing Director and Chief Executive Officer of Dangote Petroleum Refinery & Petrochemicals, Mr David Bird; Group Executive Director, Oil & Gas, Ms Fatima Aliko Dangote; Chief of Staff to the President/CEO, Ibrahim Dikko; Group Chief Branding and Communication Officer, Mr Anthony Chiejina; Group Chief Economist, Mr Hassan Mahmud; Group Chief Strategy Officer, Mr Aliyu Suleiman; and Head of Administration, Dangote Petroleum Refinery & Petrochemicals, Mr Musa Bala, among other senior executives.
By Adedapo Adesanya
The Senate Public Accounts Committee has heard that Nigeria spent N1.16 trillion on fuel subsidy in 2021, while N1.20 trillion was deducted from federation crude oil sales proceeds during the same period.
The disclosure came from the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr Mohammed Bello Shehu, during the committee’s ongoing investigation into the 2021 to 2023 Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports on the oil and gas sector.
According to the commission, crude and petroleum product losses cost N16.2 billion, pipeline repairs accounted for N22.05 billion, while strategic stock holding attracted N6.75 billion.
The revelations come against the backdrop of Nigeria’s long-running fuel subsidy regime, which successive governments maintained to keep the pump price of petrol artificially low despite mounting fiscal pressures.
Over the years, subsidy payments consumed trillions of Naira, significantly reducing revenues available to the three tiers of government and contributing to widening budget deficits.
The issue reached a turning point in May 2023 when President Bola Tinubu announced the removal of fuel subsidy during his inauguration speech, declaring that “fuel subsidy is gone.” The decision followed years of concerns over the rising cost of the programme, allegations of fraud, and repeated recommendations by fiscal authorities and international financial institutions that the subsidy had become unsustainable.
The removal triggered a sharp increase in the pump price of Premium Motor Spirit (petrol), leading to higher transportation and living costs across the country. In response, the federal government introduced a series of palliative measures, including cash transfers, support for mass transit, and wage-related interventions, while arguing that savings from the subsidy would be redirected to infrastructure, education, healthcare, and other critical sectors of the economy.
The commission also argued that the current method of calculating the 13 per cent derivation fund undermines the constitutional intention of the policy.
Meanwhile, the committee stood down the Niger Delta Development Commission’s presentation until next Wednesday to allow lawmakers review its submission.
The committee also expressed displeasure over the absence of the Auditor-General of the Federation, warning that he must appear before lawmakers next Tuesday or face compulsory appearance through the constitutional powers of the National Assembly.
