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
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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