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Financial inclusion: Evaluating PenCom’s micro pension plan

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Financial inclusion: Evaluating PenCom’s micro pension plan

For those in the informal sector of the Nigerian economy, the plan by the Federal Government to get them adequately integrated into the financial system recently took another leap with the micro-pension plan initiative. Sunday Ojeme reports

 

For a long time, operators in the the various financial institutions have designed products and deployed same to get the grassroots fit into the financial inclusion plans of government. Such efforts led to the establishment of sub-banking sectors such as the defunct community banks, series of saving scheme arrangement, micro-finance banks as well as insurance companies unleashing specific products to cover the ‘unreached.’

In the face of these noble initiatives, however, a robust retirement plan was never in place for Nigerian workers in the informal sector, hence, majority of them without sustainable investment to see them through life especially at old age are often caught in the web of abject poverty.

Informal sector

Nigeria’s informal sector is estimated at $240 billion, but also largely untapped due mainly to infrastructural failure in the system.

Unlike the formal economy, the informal economy has grown faster in size at an annual average rate of about 8.5 per cent between 2015 and 2018. This growth seen in the informal sector and an increase in employment it provides implies higher household income and lower poverty in the country.

It is particularly large in Nigeria, with the International Monetary Fund (IMF) estimating it to constitute about 60 per cent of the entire Nigerian economy.

 

 

 

 

 

 

 

 

 

Micro pension/flexibility

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With the launch of the Micro Pension Plan (MPP), artisans such as photographers, caterers, hairdressers, motorcycle service operators, tailors, fashion designers, carpenters, painters among others will now be part of the Contributory Pension Scheme (CPS), thereby guaranteeing savings towards their retirement.

 

To make it flexible for them, the plan is designed in such a way that the contributors could withdraw at least 40 per cent of the contributions in their Retirement Savings Accounts (RSA) three months after making the initial contribution. This is contrary to what obtains in the case of those in the formal sector of the economy.

 

Speaking on the micro-pension initiative, the Acting Director-General, PenCom, Mrs. Aisha Dahir-Umar, said it allowed for every contribution to be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits.

According to her, the contributor is eligible to access the 40 per cent portion three months after making the initial contribution. This flexibility is one of the incentives expected to encourage participation and consequently drive growth of the pension industry.

“As you are aware, the informal sector workers constitute the larger percentage of the working population in the country, there is therefore no doubt that robust participation would result to exponential growth of the Pension funds, which would consequently provide funding for allowable and relevant investments that would impact positively on the economy. The MPP would contribute immensely to archiving the Pension Industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024. As at 31 March 2019, the value of pension assets stood at N9.03 trillion and the number of employees 8.57 million,” she said.

Objective

While assessing the plan’s take-off, the PenCom boss disclosed that it was launched by President Muhammadu Buhari on March 28, 2019, to make life better for grassroots contributors by bringing them into the pension net.

“The very successful launch by the president is an indication that the Federal Government is committed to ensuring that informal sector workers are also covered under the CPS,” she said.

“Effectively we are just about two months into implementation after the launch. as a sequel to the launch, registration of contributors by Pension Fund Administrators (PFA) had commenced and is ongoing. Public enlightenment and engagement with relevant unions and associations is also on-going.”

She explained that to sustain the tempo and momentum achieved from the launch, the commission was planning to embark on sensitisation events in the six geo-political zones of the country.

“Overall, I would say we are off to a good start and the gains of the scheme would manifest in due course,” she added.

On the efforts that PenCom is making to ensure that more artisans and other operators at the grassroots key into the scheme, she said that in implementing the MPP initiative, the informal sector has been segmented into three broad categories, adding that prior to the implementation of the scheme, the commission had issued guidelines and framework to guide the pension operators.

. “The low income earners and the high income earners and the SMEs,” she said. “Each of these categories is going to be targeted with appropriate MPP products and sensitization programmes that meet their peculiarities. As earlier mentioned, the Commission is engaging relevant Unions and Associations in its enlightenment drive. Some of these unions and associations cover the artisans and grassroots operators. The Commission is aware that public enlightenment and pension education are key success factors and as such is working assiduously with the Pension Operators Association (PENOP) to ensure effective coverage.”

Financial inclusion

Also highlighting the commitment of the Commission to financial inclusion, she said the introduction of MPP by the commission was a major step to promoting financial inclusion at the grassroots.

According to her, Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) provides that employees of organisations with less than three employees as well as the self-employed persons shall be entitled to participate in the Contributory Pension Scheme (CPS) in accordance with guidelines issued by the commission.

 

“Those participating in the MPP would require a functional bank account, which would be used for transactions such as contributions and withdrawals. It is therefore obvious that implementing MPP will definitely promote financial inclusion,” she said.

 

The PenCom boss said: “Thus, a prospective micro pension contributor is required to open a Retirement Savings Account by completing a physical or electronic registration form with a Pension Funds Administrator of his/her choice. The contributors may make contributions daily, weekly, monthly or as may be convenient to them.

 

“Every contribution shall be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits. The contributor may, based on his/her needs, periodically withdraw the total or part of the balance of the contingent portion of his/her RSA, including all accrued investment income thereto.

“The contributor may also choose to convert the contingent portion of the contributions to the retirement benefits portion. The remaining balance in the RSA shall be available to the contributor upon retirement or attaining the age of 50 years.”

 

Analysts said achieving the Central Bank of Nigeria’s (CBN’s) financial inclusion mandate of getting 80 per cent of adult population into the financial system by 2020 requires the backing of key stakeholders such as PenCom . The PenCom is, through the RSA remittances, helping to deepen the pension industry, financial system and economy.

Guided investment

Head of Communication Department of PenCom, Peter Aghahowa, said the CPS had made the life of retirees much easier, unlike the defined benefits scheme which it replaced.

He said that PenCom has deployed the RSA Multi-Fund Structure conceived by the commission to align with contributors’ risk appetite with their investment horizon, at each stage of their life cycle.

The RSA Multi-Fund Structure are to achieve optimum returns for contributors by aligning their pension savings with their individual risk/return profiles, provide investment portfolio choices to Contributors and enhance safety of pension assets through adequate portfolio diversification, through increased investment in equities and alternative assets, such as infrastructure and private equity. We have recorded some successes so far.

To further encourage Nigerians to key into the scheme, PenCom developed a framework for recovery of outstanding pension contributions with penalty for defaulting employers.

Based on the framework, the commission engaged recovery agents for continuous enrollment into the CPS and recovery of un-remitted pension contributions plus penalty from defaulting employers. The recovery, which has been largely successful, has boosted the confidence of contributors and, by extension, encouraged non-participating employees and employers to embrace the scheme.

 

 

 

 

 

Last line

 

With the informal sector becoming more attractive globally with regard to employment, there is no better option for the Federal government to ensure the success of the micro pension plan as way of encouraging savings and also guarding against widespread poverty in future.

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Business

Samsung Galaxy Fold sells out in Nigeria

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Samsung Galaxy Fold sells out in Nigeria

The highly anticipated Galaxy Fold, a new foldable device creating a new mobile category, is clearly a hit with Nigerians as the first batch released has already sold out with pre-order sales, Samsung Nigeria said on Friday in Lagos.

It said that it was currently working on increasing stock levels to keep up with demand, adding that even after a delayed-release, there was clearly an appetite for this pioneering device.

It said that the next batch of the world’s first AMOLED Infinity Flex Display would be available in the Nigerian market from November 29.

Galaxy Fold features the world’s first 7.3-inch Infinity Flex Display, which folds into a compact device with a cover display.

It said that the device offered a powerful new way to multitask, watch videos, play games, and more – bringing to life new experiences and possibilities years in the making.

“Samsung is proud to introduce a premium foldable device, that goes beyond the limitations of a traditional smartphone,’’ said David Suh, Managing Director at Samsung Electronics West Africa in a statement.

“The pre-order sales are indicative of the public’s affinity for technology that transcends the norm.’’

He added that Galaxy Fold is in a category of its own that delivers a new kind of mobile experience allowing users to do things they couldn’t do with an ordinary smartphone.

“Users now have the best of both worlds; a compact device that unfolds to reveal Samsung’s largest-ever smartphone display, says Adetunji Taiwo, Head, Information Technology and Mobile (IM) at Samsung Electronics West Africa.

He noted that Galaxy Fold brought together material, engineering and display innovations, developed over eight years following the debut of Samsung’s first flexible display prototype in 2011.

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Energy

Why hike in cooking gas price may persist – Marketers

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Why hike in cooking gas price may persist – Marketers

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) says the current hike in price of cooking gas might persist if activities of Liquefied Petroleum Gas (LPG) Terminal Owners and Off Takers is not checked.

The Executive Secretary of NALPGAM, Mr Bassey Essien told News Agency of Nigeria (NAN) in Lagos on Friday that the development had led to increase in the price of cooking gas from N2, 600 to about N4, 500 in retail outlets.

Essien said that the Nigerian Liquefied Natural Gas (NLNG) vessel on November 13, supplied products to two terminals in Lagos to reduce the scarcity within the South West zone.

He said that this was in line with the Federal Government’s approval for the allocation of about 350,000MT of Gas per annum for local consumption through the NLNG.

Essien said the product was distributed through the terminals/off takers to gas marketers who eventually distribute to end user

“We noticed recently that gas delivered to terminals/off takers sold at N3.2 million per 20 MT a week ago suddenly jumped to between N4 million and N4. 3 million per 20MT at the terminals.

“This singular action has taken cooking gas beyond the reach of ordinary Nigerians who are forced to pay a higher price for product that the price structure from NLNG has not significantly changed.

“We therefore, dissociate our association (NALPGAM) from such exploitative acts of the terminals who are taking the industry and stakeholders for granted,” he said.

Essien said the upsurge in the price of cooking gas was detrimental to the efforts of the Federal Government at deepening cooking gas utilisation in the country.

He said that with this development, many Nigerians would go back to using kerosene and firewood which had attendant health effects.

“A filling station which was selling 300 litres of kerosene a week has seen its sales increased to about 6,000 litres because people who cannot afford gas due to the increment are going back to kerosene.

“This has so many negative effects on the economy, especially as food sellers would have to increase the prices of their food or reduce the quantity not to run at a loss,” he said.

Essien commended the NLNG for its efforts in supplying gas to Nigerians.

He added that the company would improve on its performance to deliver gas to other coastal terminals outside Lagos to reduce the inherent pressure on the terminals in the South West.

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Aviation

SAA workers start strike that could cripple airline

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SAA workers start strike that could cripple airline

Workers at South African Airways (SAA) downed tools on Friday in a strike over wages and job cuts that has forced the troubled state-owned carrier to cancel all flights and left its future hanging in the balance.

SAA, which has not turned a profit since 2011 and is without a permanent CEO, says the strike by unions representing around 3,000 of its 5,000-strong workforce will cost it 50 million rand ($3.36 million) per day and threatens its survival.

The unions rejected SAA’s wage offer late on Thursday, and are also striking over the carrier’s plans to cut more than 900 jobs in a bid to stem financial losses and become viable without the state bailouts it has relied on so far, reports Reuters.

SAA’s acting chief financial officer, Deon Fredericks, told the eNCA news channel that the airline, hurt by past mismanagement, could not just close its eyes and carry on.

“We’ll just go deeper down,” he said.

SAA is trying to negotiate much-needed funding from banks, Fredericks told radio station 702, but added the strike would hurt the talks as it would have a negative impact on cash flow. “If we don’t get that funding we will not be able to continue.”

The National Union of Metal Workers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) called the SAA strike from 0200 GMT on Friday. NUMSA has said it will continue until the unions’ demands, including for an 8% wage increase and job security, are met.

The action is not an attempt to hurt the airline but force the government to intervene so its board and management make the right decisions, SACCA President Zazi Nsibanyoni-Mugambi said.

“In our eyes this is an attempt to save (SAA) from its current management and board,” she told 702 on Friday.

Two other unions at SAA representing about 2,500 employees mostly in technical and mid-management jobs said they would go to the labour court to block the airline’s plan to cut jobs.

SAA, which cancelled all flights on Saturday, is among a number of state-run firms that are battling tough financial conditions after years of poor governance and so-called ‘state capture’ – widespread corruption involving billions of rands worth of state contracts during Jacob Zuma’s presidency.

President Cyril Ramaphosa has staked his reputation on turning them around.

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Business

Stop kids from viewing porn, Pope tells tech companies

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Stop kids from viewing porn, Pope tells tech companies

Pope Francis called Thursday for Facebook, Apple, Microsoft, Google and other tech companies to urgently take measures to remove child porn from the web and prevent children from accessing pornography online.

Francis told a Vatican conference of religious leaders and high-tech representatives that it’s no longer acceptable to merely follow the law in monitoring online content, because technology is fast outpacing regulation, reports The Associated Press.

He said tech and computer software companies should assume a moral responsibility to protect young people from what he said were the ruinous effects of pornography on their emotional and sexual development.

“There is a need to ensure that investors and managers remain accountable, so that the good of minors and society is not sacrificed to profit,” he said.

Francis was addressing participants at the conference “Promoting Digital Child Dignity,” which follows on a 2017 conference hosted by the Jesuit university in Rome and a 2018 meeting in Abu Dhabi.

Francis cited obligatory age verification technology and artificial intelligence to eliminate criminal porn from the web as two concrete measures high tech companies and software-makers could take to protect children.

The Vatican has sought to raise awareness about protecting children online as part of its response to the Catholic Church’s dreadful record with clergy sexual abuse. The issue has hit close to home for Francis, after one of his diplomats was sentenced to five years in prison by a Vatican court for viewing child pornography, and one of his own Argentine bishops was placed under investigation by the church after porn was found on his cellphone.

The two-day conference at the Vatican featured speakers from Microsoft, Apple, Amazon, Google, Facebook and Paramount Pictures, U.N. and EU officials, as well as the spiritual leader of the world’s Orthodox Christians and the grand imam of the Al-Azhar university in Cairo, the seat of Sunni learning. Francis’ secretary of state, Cardinal Pietro Parolin, was to close out the conference on Friday, in an indication of the importance the Vatican placed on it.

In his remarks, Francis said technology has obvious benefits for children, but also poses risks and negative effects that often aren’t apparent until it is too late to remedy them.

He indirectly dismissed claims by Facebook and other social media companies that they are merely “platforms” for others to share content.

“It is now clear that they cannot consider themselves completely unaccountable vis-a-vis the services they provide for their customers,” he said. “So I make an urgent appeal to them to assume their responsibility toward minors, their integrity and their future.”

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Business

Zimbabwe to cut VAT to boost consumer demand

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Zimbabwe to cut VAT to boost consumer demand

Zimbabwe plans to cut value added tax (VAT) from January to stimulate consumer demand in an economy set to a contract this year after a drought and power shortages, Finance Minister Mthuli Ncube said on Thursday.

The southern African nation is in the grips of its worst economic crisis in a decade, marked by shortages of foreign currency, fuel and rolling power cuts lasting up to 18 hours a day.

Presenting the 2020 budget to parliament, Ncube proposed cutting VAT to 14.5% from 15% effective January 2020. He also proposed lowering the corporate income tax rate to 24% from 25%, reports Reuters.

President Emmerson Mnangagwa, who took over from the late Robert Mugabe in 2017, is struggling to convince the population that his economic reforms will work.

Everyday life is increasingly difficult. Prices of basic goods, fuel and electricity have risen sharply while salaries have lagged behind.

That trend could continue after Ncube said he would from next January remove subsidies on maize and wheat, the two most consumed crops in Zimbabwe.

To give some relief to Zimbabweans who have seen their incomes eroded by inflation, which economists estimate at 380%, Ncube also raised non-taxable monthly income to 2,000 Zimbabwe dollars ($130) from 700 Zimbabwe dollars.

Ncube painted a rosier outlook on GDP growth, forecasting that the economy would grow by 3% next year after a projected contraction of 6.5% this year, helped by better agricultural output and electricity supplies.

He also said the country’s budget deficit would narrow to 1.5% of gross domestic product (GDP) in 2020 from 4% of GDP this year as the government keeps spending in check.

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Aviation

Direct Qantas flight completes non-stop journey from London to Sydney

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Direct Qantas flight completes non-stop journey from London to Sydney

A non-stop flight from London to Sydney has landed, 19 hours and 19 minutes after take-off.

The Boeing 787-9 Dreamliner is believed to have set a long-distance record for a passenger jet, reports standard.co.uk.

It left Heathrow around 6am (local time) on Thursday and touching down at Sydney Airport at 12:28pm on Friday (1.30am UK time).

The flight was conducted to research the effects on crew and passengers of ultra-long-haul services which are under consideration by the airline.

It was carrying 40 people, many of them Qantas staffers.

Those on board witnessed two sunrises, the first to the right of the aircraft as it headed north-east after takeoff, and the second to its left as it flew over Indonesia.

Aside from research, the flight kicked off a year of celebrations for the centenary of the airline, which will officially turn 99 on Saturday.

Qantas Chairman, Richard Goyder said the flight continued the airline’s history of helping Australia engage with the rest of the world.

“Qantas is a national icon because it’s been such a big part of Australian life for so long,” Goyder said in a statement.

“Our founders talked about overcoming the tyranny of distance and through the years we’ve moved from bi-planes, to single wing, to jets to help bring things closer.”

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Business

Airtel acquires Intercellular in $70m deal

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Airtel acquires Intercellular in $70m deal

Airtel Africa yesterday announced the acquisition of Intercellular Nigeria in a transaction valued at about $70 million.

The acquisition is aimed at boosting its Nigerian operation, Airtel Nigeria, with additional spectrum to expand its network across the country.

Airtel Africa disclosed this in a regulatory filing to its shareholders through the Nigerian Stock Exchange (NSE).

The telecoms firm, with a presence in 14 countries on the continent, said its Nigerian subsidiary signed an agreement with Intercellular Nigeria Limited to acquire an additional 10 megahertz (MHz) spectrum in the 900 MHz band in Nigeria.

Intercellular Nigeria Limited commenced commercial operations as a public company in 1998 after being awarded a National Fixed License in 1996.

Prior to its acquisition, Intercellular Nigeria operated with a National Unified Access Service License and was able to provide a complete range of telecommunication services to Nigerians.

Airtel Africa said the acquisition of the additional spectrum would allow Airtel Nigeria to expand its operations and strengthen its LTE network across Nigeria, considered the largest market for Airtel Africa.

The deal is, however, subject to regulatory approval by the Nigerian Communications Commission (NCC).

The latest acquisition aligns with the company’s plan to continue to dominate the tele-mobile communications space on the continent.

Last August, the company unfolded plans to roll out its mobile money platform. The company said it was continuing its aggressive investment in its 4G network infrastructure, with nearly 1,500 additional sites across its operational locations, apparently preparatory to the roll out.

In the last six months period ended September 30, 2019, Airtel Nigeria announced a 23 per cent increase in its revenue, with revenue from data sales increasing by about 76 per cent during the period, driven by the accelerated rollout of its 4G network.

The increase in data customer base rose by about 20.8 per cent, with an ARPU growth of about 43 per cent. The report said during the period, 4G data usage by its customers increased by almost 20 folds.

Reacting to the latest acquisition, the Chief Executive of Airtel Africa, Raghunath Mandava, identified data as a key pillar of the company’s growth, driven by increasing 4G networks, supported by the increased affordability and increasing penetration of smartphones.

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Business

ProPetro confirms SEC probe, accounting weaknesses

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ProPetro confirms SEC probe, accounting weaknesses

Oilfield services firm, ProPetro Holding Corp, on Wednesday, said a board of investigation had uncovered material weaknesses in its financial controls and an undisclosed related-party transaction with its former chief accountant.

The Midland, Texas-based company also confirmed Reuters’ report last month that the U.S. Securities and Exchange Commission had opened an investigation in its financial disclosures and reporting.

ProPetro provided the first snapshot of its business since disclosing the departure of its chief accounting officer and the demotion of two top officials amid an internal investigation into its financial accounting and disclosures.

According to Reuters, its board identified weaknesses in internal controls, two of which were material and at least one of which existed since Dec. 31. It plans to amend its 2018 annual report and first-quarter 2019 financial filing to reflect the change, it said in a statement.

The undisclosed related-party transaction involved a business owned in part by former chief accounting officer Ian Denholm that had sold or leased a facility to ProPetro. Denholm resigned in October.

He did not immediately respond to a LinkedIn request seeking comment and attempts to reach him by phone were unsuccessful.

ProPetro also said it would not file its second- and third-quarter reports to the SEC before Dec. 31 due to the continuing investigation. Its internal review, however, has not to date identified anything requiring restatements of its balance sheet, statement of operations, shareholders’ equity or statements of cash flow, it said.

A company spokesman declined a request to interview an executive on Wednesday. ProPetro will hold a conference call on Thursday morning to discuss its results.

The company reported net income fell to $34.4 million, or 33 cents per share, for the three months ended Sept. 30, from $46.3 million, or 53 cents per share, a year earlier.

ProPetro has disclosed real-estate and rental transactions with executives and board members. In addition, Chief Executive Officer and co-founder Dale Redman and former finance chief and co-founder Jeffrey Smith reimbursed the company a combined $364,000 for expenses improperly billed to ProPetro.

Shares of ProPetro, which went public in early 2017, were up about 5.5 per cent at $7.74 in after-hours trading after closing down 4.6 per cent on Wednesday.

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Business

NSE: Investors gain N246bn

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NSE: Investors gain N246bn

Market rises to five-week high

 

Nigerian stock market rose 1.91 per cent to a five-week high yesterday, boosted by demand for stocks in banking and other blue chip firms.

The index, which is down 16 per cent so far this year,  firmed up to a level last seen in October, as most bank shares recorded appreciable growth.

Analysts at Afrinvest Securities Limited had said recent CBN restrictions on Open Market Operations (OMO) would restore confidence in the volatile stock market, considering the low stock prices.

“The CBN recently restricted individuals, local corporates, and non-banking financial institutions from participating in both the primary and secondary markets of Open Market Operation (OMO).

“Following this directive, we expect investors’ focus to shift towards equities due to current low prices and attractive dividend yields,” the analysts said.

The key market performance measures, the NSE All Share Index and market capitalisation, rose by 1.91 per cent as market sentiments returned to gaining streaks following investors’ sustained optimism on undervalued stocks.

Consequently, the All-Share Index gained 504 basis points or 1.91 per cent to close at 26,843.11 as against 26,339.11 recorded the previous day while the market capitalisation of equities appreciated by N243 billion or 1.91 per cent to close at N13.067 trillion from N12.821 trillion as market sentiment returned to the green zone.

Meanwhile, a turnover of 624.8 million shares exchanged in 6,426 deals was recorded in the day’s trading.

The premium sub-sector was the most active (measured by turnover volume); with 368 million shares exchanged by investors in 2,623 deals.

Volume in the sub-sector was largely driven by activities in the shares of Zenith Bank Plc and Access Bank Plc.

The banking sub-sector boosted by activities in the shares of GTBank Plc and Sterling Bank Plc followed with a turnover of 105.5 million shares in 2,668 deals.

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Attaining full-scale groundnut production

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Attaining full-scale groundnut production

In a bid to improve on groundnut production value chain, the National Groundnut Producers Processors and Marketers Association of Nigeria (NGROPPMAN) has revealed plans to boost groundnut production to 17.5 million metric tonnes by the end of 2025. Taiwo Hassan reports

 

 

Nigeria produces 41 per cent of the total groundnut in West Africa. Besides, the groundnut pyramids used to be conspicuous in Kano city of Kano State (northern Nigeria).

The huge piles of sacks that tapered to a point higher than most of the buildings, were a symbol of northern Nigeria’s abundance in an important cash crop.

But today, the dusty yards where the groundnut marketing board stock- piled farmer’s harvest lie mostly empty and have been occupied by buildings.

The history of groundnut in Nigeria dates back to 1912, when most farmers were encouraged by high economic returns from groundnut. The marketing of the crop was well organised at that period.

At the end of each production season, agents moved to various parts of the region to purchase the produce while some farmers preferred to carry their produce by themselves to Kano city, where it was sold at a price fixed by the marketing board. The produce was collected from strategic collection centers and then transported to the port of Lagos by train.

Groundnut production decline

However, groundnut production in Kano and neighboring states has declined significantly. For instance, the total groundnut production up to 1973 used to be more than 1.6 million tonnes, which has come down to less than 0.7 million tonnes in the mid 80’s.

Both farmers and traders shifted to other agricultural (e.g. cowpea, sorghum, millet) and horticultural crops. This decline also affected industries, which used groundnut as raw material. Some even closed down or shifted to other oil seeds.

Reasons

Several factors led to the rapid decline in groundnut production in Nigeria. The major causes were drought, rosette virus, and general neglect of agriculture due to oil boom, lack of organized input and marketing and dissolution of groundnut marketing boards.

There have been adverse changes in rainfall pattern in the last 30 years. Average annual rainfall has reduced drastically from 800 mm to 600 mm and consequently the length of the growing season has become shorter (from 4 to 3 months).

Breakdown shows that drought spells have become more frequent than ever before. This undoubtedly has led to the failure of groundnut, which requires more than 4 months with the currently available cultivars to reach maturity. Drought has also been associated with outbreaks of diseases and insect pests such as aphids. Aphids are carriers of the groundnut rosette virus, which is a devastating disease. It wipes out the entire crop during epidemic outbreak.

For example, in 1975, an epidemic of rosette virus destroyed nearly three quarters of a million hectares of the crop in Nigeria and wiped out regional trade worth estimated at $250 million.

Subsequent epidemics in 1983, 1985 and 1988 had a major impact on farmers’ decisions. Many of the farmers who suffered financial ruin have stuck to other crops such as cowpea, sorghum and pearl millet.

Experiments

As a consequence, groundnut production has not yet returned to the pre-1970 levels of 1.8 million tonnes. Research on fertilizer use in northern Nigeria began in 1925. Experiments have shown that groundnuts respond to added superphosphate. Seed for planting was freely distributed to growers and cash subsidy was later introduced. This encouraged farmers to use high quality seeds and fertilizer.

Boost

However, following the introduction and application of suitable fertilizer, the country’s groundnut production has been steadily since the farmers were taught on the need to use high quality seeds which automatically buoys increased in volume of production.

To consolidate the country’s groundnut production and value chain, National Groundnut Producers Processors and Marketers Association of Nigeria (NGROPPMAN) believes that attaining groundnut production target of 17.5 million metric tonnes by the end of 2025 from its present level can be achieved.

President of NGROPPMAN, Aimu Foni, told newsmen after the conclusion of a stakeholders’ meeting in Abuja that plans were already underway.

He said that the 17.5 million metric tonnes projected was part of the groundnut draft policy, being reviewed by important stakeholders.

Foni stressed that the policy would improve the production of groundnut and help reposition other value chains when adopted by the stakeholders and supported by the Federal Executive Council.

“The objective of the draft policy, which is still under review, is to improve groundnut production and make it a major source of revenue generation for the government.

“The policy when approved will further tackle the problem of training and extension services, critical to agricultural development. Also, the document will help with risk management, marketing as well as competitiveness to ensure robust domestic consumption and high-quality export,” he said.

‘Next level’ mantra

The Secretary-General of the association, Adeniyi Adebayo, said the stakeholders were eager to take groundnut production to the next level.

He said, “We met to see how to contribute meaningfully to the new groundnut policy. As you know, we are into production, processing, and marketing as a sub-sector and the draft policy is focused on these areas.

“In terms of production, it dwells on how the lives of groundnut farmers will be improved. Most times when there is excess production, farmers are often left to bear their losses as they sell their produce at giveaway prices.”

Adebayo expressed hope that when adopted by stakeholders and sent by the Minister of Agriculture and Rural Development to FEC, it would be approved.

Last line

With the groundnut draft policy review underway, agric stakeholders believe seed is basic to agriculture and makes a major contribution to agricultural productivity. Unless groundnut seed is available in the right place, at the right time, in adequate quantities and quality at affordable prices, it will be difficult to meet the target.

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