CBN Maize Import Ban May Cripple Poultry Sector—Don
By Dipo Olowookere
When a few days ago, the Central Bank of Nigeria (CBN) directed authorised foreign exchange (forex) dealers in the country to stop selling Dollars to importers of maize, many farmers jumped for joy.
They were happy because like in the rice sector, where the ban on importation has been largely effective, this policy will most likely make them richer because of the possible rise in demand.
But the Director of the Lagos Business School Agribusiness Programme, Dr Ikechukwu Kelikume, has warned that the policy may cripple the poultry industry, where relies on the commodity to feed their birds.
The don described the forex ban on maize imports as ill-timed, with potentially negative consequences for the struggling sector.
He said maize, which constitutes over 50 per cent of poultry feed content, is currently very scare and where available, is very expensive, even as the price keeps rising.
Although he admitted that the CBN’s earlier policies of Agric, Small and Medium enterprise scheme and the Anchor Borrowers Programme have been largely successful, he opined that the current decision to discontinue the processing of Form M for the importation of Maize could reverse the gains of those interventions.
Business Post reports that on July 13, 2020, the apex bank announced restricting access for the importation of maize, explaining that the decision was taken “to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and increase jobs which were lost as a result of the ongoing COVID-19 pandemic.”
But for Mr Kelikume, “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.”
He stressed that, “A negative spillover effect of the high cost of feed is the scarcity of eggs and a consequent rise in its price across the country.”
The don noted that, “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.”
“As it stands, there is no alternative for the poultry farmers, as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business.
“This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years.
“Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood,” he added.
The university teacher stated that the apex bank’s decision to ban maize importation was too abrupt, urging the CBN to reverse the decision.
“As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of Maize/Corn must be revisited.
“It is expedient at this time for the Central Bank to allow importers of maize to import it through the CBN Foreign exchange window, to close the gap in maize shortage while preparing for phased discontinuation of maize importation in the country,” he submitted.
Mr Kelikume estimates the current shortfall in the maize value chain to be around 100,000 metric tons, which translates to an import bill of less than $20 million, describing that as a negligible import burden, even in the current tight foreign exchange situation, and a small price to pay to salvage the poultry sector.
“The time to act is now. The government must put its mechanism in place to import Maize into the country as a temporary measure to plug the pending scarcity that is imminent in the last quarter of the year 2020. Nigeria has a high production potential for maize.
“Notwithstanding, the current challenge is that the production and supply bottlenecks in the sector have first to be checkmated for any meaningful import restriction measure to be effective,” the LBS Agribusiness Programme Director further counselled.
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Seplat Sues Co-founder Orjiako, Amaze Limited to Protect Shareholders, Others
By Dipo Olowookere
A legal action has been instituted against the co-founder of Seplat Energy Plc, Mr A.B.C. Orjiako, by the indigenous energy company at the Federal High Court in Abuja over breaches of an agreement between them.
A statement issued by Seplat disclosed that the organisation entered into a consultancy deal with Mr Orjiako, through his firm, Amaze Limited.
According to the disclosure, which was made pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange Limited, 2015, also known as issuer’s rule, Mr Orjiako failed to do something about the alleged breaches after his attention was called to infractions.
As a result, Seplat Energy terminated the “consultancy agreement between the company’s wholly-owned subsidiary and its co-founder, Dr. A.B.C Orjiako, acting through Amaze Limited” with immediate effect and is seeking “appropriate legal remedies.”
“Under the consultancy agreement, Dr Orjiako was obliged to provide defined assistance with certain external stakeholder engagements following his retirement from the board after the 2022 Annual General Meeting in May 2022,” a part of the notice stated.
It was further noted that the board of directors of the organisation “unanimously approved” the termination of the contract “following repeated warnings about breaches of a material nature, such as unilaterally making significant commitments on Seplat’s letterhead without prior board authority or knowledge.”
It explained that the suit “was necessary to protect the company and its shareholders, directors, and officers from potential and increasing liability arising from the conduct of the consultants, Dr Orjiako and Amaze Limited.
“Seplat Energy reiterates its commitment to high standards of corporate governance across all areas of its business. The matter is now sub judice and awaiting resolution by the court,” the statement noted.
FAAC Allocation to FG, States, LGs in March Shrinks to N722.7bn
By Aduragbemi Omiyale
The amount shared to the three tiers of government, the federal government, state governments, and local governments, by the Federation Account Allocation Committee (FAAC), decreased in March 2023 from the money distributed in February.
A communique issued on Wednesday after the FAAC meeting in Abuja disclosed that N722.7 billion was disbursed from the revenue generated by the country last month compared with the N750.2 billion shared in February.
A breakdown showed that the total distributable revenue of N722.677 billion comprised distributable statutory revenue of N366.800 billion, distributable Value Added Tax (VAT) revenue of N224.232 billion, Electronic Money Transfer Levy (EMTL) of N11.645 billion and N120.000 billion Augmentation from Forex Equalisation Account.
In the disclosure signed by the Director of Press and Public Relations of the Office of the Account-General of the Federation (OAGF), Mr Bawa Mokwa, it was disclosed that in February, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Oil and Gas Royalties, Import and Excise Duties all decreased significantly while Value Added Tax (VAT) and Electronic Money Transfer Levy (EMTL) decreased marginally.
Explaining how the money was disbursed, FAAC said from the N722.677 billion, the federal government received N269.063 billion, the state governments got N236.464 billion, and the local councils were given N173.936 billion, while N43.214 billion was shared to the oil-producing states as 13 per cent derivation revenue.
Further, from the N366.800 billion distributable statutory revenue, the federal government received N178.683 billion, the state governments received N90.630 billion, and the local government councils received N69.872 billion, with relevant states getting N27.614 billion as 13 per cent derivation revenue.
In addition, from the distributable N224.232 billion from VAT, the federal government received N33.635 billion, the state governments received N112.116 billion, and the local councils received N78.481 billion.
The statement also said N11.645 billion Electronic Money Transfer Levy (EMTL) was distributed as follows: the Federal Government received N1.747 billion, the State Governments received N5.822 billion, and the Local Government Councils received N4.076 billion.
From the N120.000 billion Augmentation, the Federal Government received N54.998 billion, the State Governments received N27.896 billion, the Local Government Councils received N21.506 billion, and a total sum of N15.600 billion was shared to the relevant States as 13 per cent of mineral revenue.
In February 2023, the total deductions for the cost of the collection were N27.449 billion, and total deductions for transfers, savings, recoveries and refunds were N109.909 billion, while the balance in the Excess Crude Account (ECA) was $473,754.57, the same amount it had remained since December 2022.
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