Economy
Nigeria’s Wheat Value Chain’s Growing Importance to Job Creation, Food Security
The wheat value chain continues to play key roles in providing employments for the active segment of the population while strengthening the nation’s food security position.
The jobs and the affordable meals that are being delivered to the local markets through the bold developmental actions pursued by the local wheat millers couldn’t have come at a better time as Nigeria’s unemployment situation and inflationary trends grow agonizingly worse.
Data released by the National Bureau of Statistics (NBS) indicates that unemployment, underemployment and youth unemployment/ underemployment, reached 33.3 %, 22.8 %, 42.5% respectively in the 4th quarter of 2020 in the country.
Meanwhile, the increasing dietary shift to more affordable wheat derivative foods such as bread, semolina, pasta and noodles has led to expanded production, processing, warehousing, distribution/ logistics, fleet management, last-mile and retailing activities in the wheat value chain, consequently lifting the employment generating capacity of the value chain from 10 million to 12 million.
Coming at such a crucial time when the impact of the COVID-19 pandemic incessantly weakens the economic contributory latency of other sectors, the robust activities being generated along the wheat value chain are a rare lift for Nigerian households.
The wheat value chain does not only provide jobs for the population, it also ensures the population has consistent access to affordable quality foods.
In the past year, the prices of Rice, Garri, millet and Beans, which are notable national staples, have risen sharply by 21.1%, 114.1%, 57.2% and 66.6%, respectively, while the prices of wheat derivative foods have been largely cushioned from the adverse inflationary trend by local millers.
The flour milling companies, under the aegis of the Flour Milling Association of Nigeria (FMAN), and the bakers, intentionally absorb the extra cost of production occasioned by the tough operating environment, in order to keep feeding the population.
Take for instance bread, a widely consumed staple food produced from wheat. The wheat millers continue to ensure that while other food commodities increased in price by 50% and more in the past year, bread is shielded from such debilitating trend, increasing by just 28.5% and the average daily production output of 10 million loaves is maintained. To this end, bread has traditionally become the cheapest carbohydrate option available for Nigerians.
The availability of quality flour brands at competitive prices helps the bakers to maintain production level, forgo downsizing and help meet customers demands, despite the adverse effects of the COVID-19 outbreak. Bakers, therefore, understand the importance of the millers’ intervention efforts.
How did the flour millers achieve such an important economic balancing act? The flour millers intentionally track commodity prices in the carbohydrate food staple space to keep the price of inputs for bread production competitive. The same goes for every other wheat derivative food such as semolina, noodles and pasta, which the flour millers intentionally ensure are kept within affordable price boundaries of the consumers.
A global consulting firm, KPMG, attests to the important roles played by flour millers in feeding a national population that has over the years been priced out of the other staple foods due to continuous food price inflation, a spike in unemployment rate and a declining income level.
In a report themed ‘Wheat-based consumer foods in Nigeria’, KPMG underscored the fact that the flour milling businesses that operate in Nigeria have been a source of “low-cost convenient staple and baked foods” for the teeming population.
This also explains why 45% of the food variants served in Nigerian homes are produced from wheat. As more foods are being served to nourish, sustain and strengthen the Nigerian populace, by direct correlation, more jobs are also being created by the wheat millers and the wheat value chain.
Speaking on the employment-generating and food security roles played by the wheat value chain, Mr Ashish Pande, Managing Director of Crown Flour Mill (CFM) Limited, a subsidiary of Olam, an agribusiness conglomerate, said: “Presently, the wheat value chain accounts for over 10.5 million jobs generated annually in Nigeria. This of course has placed the wheat value chain at the centre of the various economic development agenda of the Federal Government of Nigeria.”
To reiterate the nutritional and economic contributions of flour millers, Ashish expatiated further, “Presently, the wheat value chain adds N2.3 trillion to Nigeria’s GDP annually, being the average yearly spend on wheat derivative foodstuffs; and accounts for 75 million of the daily food portions in Nigerian households.”
He said, “To scale up its contributions, the milling association continues to invest N500 million annually in seed trials, research, training of smallholder wheat farmers and reimbursing the various farming research institutes in the country to ensure that the current local production levels of wheat improve significantly. While these efforts have ensured that we keep providing affordable and quality food for the growing Nigeria population, it has also deepened the rate of jobs generated for the young and active of the population.”
Similarly, Professor Adetunji Kehinde, provost of the College of Agriculture, University of Osun, provided an insight into the robust activities that keep turning out the impressive job creation rates in the wheat value chain.
He said, “Like other agro-products, the wheat value chain has created and is still creating employment at the pre-production (procurement of loan for land, labour, and training), production (seed procurement to field management till harvesting time), harvest (methods, tools, labour, and transport) and postharvest (handling, storage, processing, and milling), preservation, packaging, distribution and marketing levels. The wheat milling industry is one of the most important drivers of employment in the food sector.”
Considering the contributory role that the wheat value chain plays in employment generation and food security, all hands must be on deck to support flour millers, in their current efforts to strengthen the all-important value chain.
Formulating and implementing a developmental agro and financing policy framework that would ensure that flour millers continue to access wheat would help maintain the key roles of providing affordable staple foods and employment for the Nigerian population. This should be the focus of the Federal Government and relevant agencies and key stakeholders, especially at this challenging period.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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