President Muhammadu Buhari yesterday commissioned the new 3 million Metric Tonnes capacity per annum state-of-the-art Dangote Fertiliser Urea Plant, with an emphatic assurance that the project would give a huge fillip to Nigeria’s agricultural sector, which revitalization has been a focal point of his administration’s economic policy.
The new plant, which he commissioned in the presence of some 18 governors, ministers, captains of industries as well as prominent traditional rulers, is located at Ibeju Lekki, Lagos Free Trade Zone within the periphery of the Dangote refinery.
A visibly excited President Buhari said the coming on stream of the plant would create huge opportunities in the areas of employment, trade, warehousing, transport and logistics. The Plant, according to the President “will greatly create wealth, drastically reduce poverty and secure the future of our nation”.
He said, “In the agricultural sector, another focal point of our economic policy, we expect a boom as fertiliser is now readily available. Many Nigerians who hitherto practiced subsistence farming because of non-availability of necessary inputs can now take up agriculture as a business. We expect a rise of new breed of agropreneurs who will add value to farming and make the nation self-sufficient in food production.”
According to him, the federal government is now determined more than ever before to provide enabling environment for private sector investors to thrive, adding that his government would continue to improve on infrastructure, power, security and enact relevant laws and regulations that would drive investments in the economy.
President Buhari reiterated that part of the government’s effort in this regard was the partnership with the private sector government via a tax credit scheme, in the rehabilitation of roads across Nigeria under the Presidential Order No. 7.
“As we all know, good roads contribute to easy movement of goods and services across the nation, thus reducing cost of doing business and improving productivity. We are also rehabilitating our railway lines and building new ones to lessen the burden on our roads and create more effective multi-model transportation networks,” he added.
In an earlier welcome address, President of Dangote Group, Aliko Dangote described the new plant as a game changer, as it has the capacity to make Nigeria become self-sufficient in fertiliser production, with spare capacity to export to other markets in Africa and the rest of the world. He added that already, Dangote fertiliser has reached the markets in the USA, Brazil and Mexico.
According to him, the Fertiliser plant, which is the largest granulated Urea fertiliser complex in Africa, occupies 500 hectares of land, was built at a cost of $2.5 Billion, and is expected to reduce drastically level of unemployment and youth restiveness in the country through employment opportunities. To him, the plant is expected to generate new jobs with top quality fertiliser being available and in sufficient quantities for the farmers.
He stated that agriculture accounts for 20 per cent of the nation’s GDP and that the new plant was an ambitious project that would provide both direct and indirect employment, thereby reducing youth restiveness
Dangote Fertiliser, according to him, would ensure emergence of farmers in the country, providing hundreds of jobs and ushering in a new era of agricultural entrepreneurs, (agroprenuers). “This breed of agroprenuers will take to farming on large scales, providing food and raw materials for our industries,” he added.
Dangote stated that the fertiliser plant is rolling out with innovations that would transform the agricultural sector in the form of extension services for small and medium scale farmers. It has set up a well-equipped fertiliser soil testing laboratory to enable it analyse and identify soil deficiency and the appropriate fertiliser blend.
“Studies have shown that applying the right fertiliser to the soil will boost productivity. This service is to cover all the geopolitical zones, and will surely change agricultural landscape in the country by transforming farming into a lucrative profession.
“Dangote Fertiliser is working with Farmer Associations, Corporate Farmers, NPK Blenders, NGO/development partners and State Governments all over Nigeria, and governments across Africa and beyond who are looking for sustainable approach to improving soil quality and farm yields,” he explained.
Speaking at the occasion, Governor of Central Bank of Nigeria, Godwin Emefiele said Nigeria is indeed indebted to Aliko Dangote for his giant stride to add value to Nigeria’s economy. According to him, “It is great that a Nigerian has taken not just this great initiative of helping to solve our perennial problem of importing petrochemical products including fertiliser but has taken advantage of the emerging huge market opportunity presented by recent global developments.”
Emefiele commended President Buhari for providing all the support needed to put in place economic policies that would reverse the trend of the doldrums, pointing out that the completion of the fertiliser plant is a stellar example of the realisation of the vision.
The CBN governor described the fertiliser plant as timely considering the recent developments in the global market, where prices of wheat, fertiliser and crude oil spiked by over 20 per cent, following the start of the Russia – Ukraine war.
“In addition to the lessons we learnt from the protectionist actions of countries during the early days of COVID-19, this investment is again a glaring testament to the foresight and tireless efforts of Mr. President in encouraging domestic production of items that can be produced in Nigeria, especially agriculture. This would not only help to enable greater productivity of our agricultural sector but also help in insulating Nigeria farmers from depending on imported fertiliser,” Emefiele stated.
He recalled that prior to 2015 when President Buhari resumed office, Nigeria had a fertiliser shortfall of about 3.5 million tonnes per annum compared to the over 6 million tonnes per annum required in the country.
“Then President Buhari inaugurated the Presidential Fertiliser Initiative and charged them with resolving this problem. With sustained efforts, other indigenous companies like Indorama and Notore with a combined capacity of over 2.5 million tonnes per annum have tried to match the market demand, yet the country still faced a huge shortfall of fertiliser supply. Today, Nigeria is self-sufficient in the production of urea, and we are also the leading producer of urea in the African continent,” he added.
The Minister of Agriculture, Dr. Mahmood Abubakar called on other investors to rise up to the occasion, noting that the Dangote Fertiliser would help to solve the problem of fertiliser shortages in Nigeria. He also assured that the government would enforce standard in the industry to maintain quality.
Lagos state governor, Mr. Babajide Sanwo-Olu commended Alhaji Aliko Dangote for always blazing the trail, noting that Lagos state government was happy to be hosting many of his businesses. He added that, “with the largest fertiliser plant in Africa in Lagos and the largest refinery in the world coming soon, there is nobody that would not be proud of Alhaji Dangote.”
The governor stated that Nigeria would quickly forget its many economic problems if another entrepreneur like Dangote could be replicated in other regions of Nigeria.
Sanwo-Olu also said that private investors could always count on Lagos State government when it comes to provision of an enabling environment to make businesses thrive.
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Appeal Court Exonerate Zenith Bank, Upturns High Court Judgement Slam Fine on Real Integrated & Hospitality Limited
After several months of legal tussle between Zenith Bank Plc v Real Integrated & Hospitality Limited and State Universal Basic Education Board (SUBEB) Gombe State, a three-man panel in the Court of Appeal sitting in Lagos led by Justice Muhammed Sirajo in Appeal No:CA/LAG/CV/262/2022 – have unanimously upturned the Lagos State High Court judgment of Justice O. O. Abike-Fadipe over claims that; on March 8, 2022, there was a breach of contract because on October 7, 2011, Zenith Bank refused Real Integrated to withdraw from its Account No. 1012465427. In her judgment, she directed Zenith bank to pay an interest of 15 per cent per annum on the N872,780,522.84 from May 17, 2011, when the advanced payment guarantees expired till judgment and thereafter at the rate of 10 per cent per annum until final liquidation
Through Zenith Bank’s team of counsel led by Prof. Fabian Ajogwu, SAN and Mr Sylva Ogwemoh, SAN, the bank challenged Justice O. O. Abike-Fadipe’s decision of awarding N2,500,000 as the cost of the action in favour of Real Integrated. The legal team via valid argument backed by proofs argued and sought an order setting aside the lower court decision on the ground that it acted in full compliance with its contractual obligations in line with the Advanced Payment Guarantee (APG) contract and that the trial court was wrong. The Court of Appeal, in a unanimous decision on November 23, agreed with the bank’s submission and resolved all the issues raised in its favour. It was gathered that; the 1st Respondent, through its Counsel, E.O Jakpa, argued that the bank breached the contract while SUBEB Gombe State did not contest the Appeal.
Apart from the appellate court setting aside the judgment of Justice Abike-Fadipe, the judge also awarded a cost of N200,000 against Real Integrated & Hospitality Limited and in favour of Zenith Bank. The appeal court further stated that the lower court judgment was upturned on the ground that the trial court was wrong to have presumed that the bank withheld the full account statement of Real Integrated in the light of Exhibit C6 (the comprehensive Statement of Account of Real Integrated), which was tendered by the bank for a limited purpose, adding that there was no need for the lower court to have invoked Section 167 (d) of the Evidence Act, 2011 against the bank.
Dollar crisis: EFCC plans massive raid on forex dealers
The Economic and Financial Crimes Commission on Tuesday carried out simultaneous operations against Bureau de Change operators in Abuja and Kano, as the Naira slumped to N857 to a dollar at the parallel market.
The PUNCH gathered that the raids in the two cities, which netted a good number of illegal BDC operators and individuals suspected to be customers, would also be extended to Lagos, Onitsha, Ibadan, Port Harcourt and other major cities across the country.
Our correspondents learnt that the incident disrupted the day’s business as many of the BDC operators in Abuja went underground.
This is happening as the EFCC arrested the Kogi State House of Assembly candidate of the New Nigeria Peoples Party, Ismaila Atumeyi and two others with N326m and $140,500 cash.
The black market forex dealers were carrying on their business activity as usual when the EFCC operatives backed by armed policemen stormed their makeshift stalls located opposite the Sheraton Hotel in Zone 4, Wuse, Abuja and took many of them into custody.
An eyewitness noted that the arrested suspects were dragged into waiting vehicles as the incident stalled traffic in the area.
In the wake of the Central Bank of Nigeria’s announcement that the redesigned naira notes will replace higher notes to fight counterfeiting, inflation and insecurity with effect from December 15, the national currency has continued to be under pressure against the dollar.
The development was blamed on BDC operators and individuals desperate to convert their ill-gotten money into hard currency.
The EFCC Chairman, Abdulrasheed Bawa had endorsed the planned redesign of the naira and cautioned BDC operators against currency hoarders who would attempt to seize the opportunity to offload the currencies they had illegally stashed away.
Giving an insight into the raids in Abuja and Kano, a senior official explained that the EFCC has been monitoring the activities of forex dealers in the two cities, adding that the operations were intelligence-led.
He also disclosed further that the raids would be extended to Lagos, Port Harcourt, Maiduguri, Ibadan and other cities across the country to stop BDC operators from ‘destroying the naira.’
“Today’s (Tuesday) operations were successful as they were intelligence-led. We have placed various bureau de change points under watch since the CBN announced the redesign of the naira.
“So, we know that those with illegal wealth would want to take advantage of the development to off-load their stash and convert it to dollars. It is not a one-off operation; it would be extended to Lagos, Port Harcourt, Maiduguri, Ibadan, Onitsha and other cities,’’ the official disclosed.
“The EFCC spokesman, Wilson Uwujaren confirmed the raid on the forex dealers in Abuja and Kano but said he has no information on the planned operation in other cities.
“I can confirm that our operatives raided the Wuse Zone 4 area of Abuja today and arrested some BDC operators. However, I can’t confirm the number of suspects arrested yet,’’ he stated.
But speaking with The PUNCH after the raid, a forex dealer in Abuja blamed the EFCC for the crash of the local currency.
“We are all in hiding. We sell at N857/$ now. I told you it was N850/$ in the afternoon but that rate is no more possible at this time. The dollar is very scarce because the EFCC entered the market today. Maybe things will change tomorrow (today),” a forex dealer, Abubakar Attahiru, told one of our correspondents on the telephone at 6.12 pm on Tuesday.
Another BDC operator offered to buy a dollar bill at N855 as long as the seller had large sums of greenbacks.
“The more dollars you sell, the more money you make. If we buy at N850/$ from someone who has $100, we will buy at N852 from someone who has $10,000,” he disclosed.
But the Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwaadabe, said he was fully in support of the raid.
“As an association, we are in support of the raid. We cannot be seeing a lot of irregularities and still support them. It is unlicensed people that have taken over the market. The licensed are not even allowed to operate in the market,” he complained.
He explained that his association was aware of the impact of the proposed naira redesign, which had forced many Nigerians to move towards converting their naira to dollars, noting, however, that it was not a justification for the level of uncertainties in the market.
Economists have said the only major solution to the naira devaluation and the dollarisation of the Nigerian economy is productivity .
According to them, the current situation would hurt all aspects of the economy.
For a Professor of Economics at the Nnamdi Azikiwe University, Awka, Anambra State, Uche Nwogwugwu, the major problem was the CBN’s naira redesign announcement.
“What you have seen in the parallel market is a spasm of fear in the people. Why do you need to change your currency at this time when you have inflationary pressure, falling reserves and an economic downturn?
“If all of a sudden you are compelling people to change their currencies, they will be afraid and you will certainly have this kind of situation,” he said.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, explained that the current devaluation of the naira at over N800 to a dollar would take its toll on the budget deficit of the country.
“In this regard, it will affect the deficit. If we have depreciation in the currency, there will be a variation. So, we are likely to see contract variations by contractors. In some contractual agreements, there’s always a variation clause, such that if cost changes or some fundamental variables change, the cost of the contracts will change.
“So, the cost of government projects will increase. Operational costs will increase, just as it affects everybody because the depreciation of the currency has an effect on inflation.
“The main effects will be inflationary and if there is no adjustment to accommodate that increase, projects will not be completed because the value of the naira has been further eroded.”
Meanwhile, a senior lecturer and economist at Pan Atlantic University, Vincent Olusegun, emphasised that the Federal Government was turning deaf ears to the reality of the naira devaluation.
He said, “In Nigeria, the exchange rate is not a floated one, it is one we have fixed ourselves and not market-determined. So, the government is living in denial that as the naira depreciates every day, they can maintain the exchange rate.
“Also, the exchange rate regime in the country is not market-driven because the government can fix N400 plus to a dollar which is what we are doing. In reality, the ability of the government to meet up with the budget is becoming unrealistic because the purchasing capacity has been reduced heavily.’’
Buhari backs Emefiele over naira re-design
Amid controversies over the position of the Finance Minister, Mrs Zainab Ahmed, on the decision of the Central Bank of Nigeria, CBN, to embark on the redesigning of Naira notes, President Muhammadu Buhari said yesterday that the CBN has his support on the project.
Ahmed, at the weekend, declared that the CBN did not carry her Ministry along in the new Naira note plan, warning that the new notes could have dire consequences on the value of the Naira.
But Buhari in a statement by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, said he is convinced the nation will gain a lot by doing so.
Speaking in a Hausa radio interview with Halilu Ahmed Getso and Kamaluddeen Sani Shawai, Buhari said reasons given by the CBN convinced him that the economy stands to benefit from a reduction in inflation, currency counterfeiting and the excess cash in circulation.
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He said he did not consider the period of three months for the change to the new notes as being short.
According to him, “people with illicit money buried under the soil will have a challenge with this, but, workers, businesses with legitimate incomes will face no difficulties at all.”
Experts call for harmony
Meanwhile, economists and financial experts have harped on the need for harmony between the fiscal and monetary policy authorities while maintaining the independence of the CBN.
David Adonri, Vice-Chairman, Highcap Securities, said that, while it is important for both the CBN and the Finance Ministry to synergise on policy-making in order to achieve a better outcome, the independence of the CBN as obtained in other economies does not require the permission of even the president to undertake a project such as the redesigning of the Naira.
In his words: “The economy is managed by the government through macro-economic policies (fiscal and monetary policies); while the Federal Ministry of Finance (FMoF) is the fiscal authority, CBN is the monetary authority. They are expected to work harmoniously in policy formulation and implementation. Any discord between these authorities is detrimental to economic management.
“Before any policy is formulated by any of them, there ought to be in-depth consultation between them and thorough analyses to know the sensitivity on either side of the economy.
“Although each authority has its areas of exclusivity, which it may exercise without recourse, carrying each other along will facilitate superior policy outcomes.
“In this particular instance, the reasons for changing of currency by CBN are justifiable but there is no reason for not carrying the FMoF along for them to be prepared for the change. Where the monetary authority is independent, which we clamour for, the Central Bank does not even require permission from the President to undertake any monetary action.
“Independence of a central bank is essential so that monetary policy will not be influenced by political expediency.”
Further insight from CBN
The CBN, reacting to the position of the Finance Minister at the weekend, said it was surprised by the minister’s outburst and that due process was followed in arriving at the Naira redesign project, including obtaining the approval of President Muhammadu Buhari.
Also, the apex bank doused concerns about the cost of printing the new notes, saying they will come at no outrageous cost, printed in the country and within the budget of the apex bank.
According to a statement from the CBN’s spokesman, Mr Osita Nwanisobi, the apex bank stressed that the CBN remains a very thorough institution that follows due process in its policy actions.
According to Nwanisobi, the management of the CBN, in line with provisions of Section 2(b), Section 18(a), and Section 19(a)(b) of the CBN Act 2007, had duly sought and obtained the approval of the President, Major General Muhammadu Buhari (retd.) in writing to redesign, produce, release and circulate new series of N200, N500, and N1,000 banknotes.
However, urging Nigerians to support the currency redesign project, he said it is in the overall interest of Nigerians, and that some persons were hoarding significant sums of banknotes outside the vaults of commercial banks. This trend, he said, should not be encouraged by anyone who means well for the country.
Why Naira redesign is necessary — Moghalu
Commenting on the issue, a former Deputy Governor of the CBN, Kingsley Moghalu, said that the decision of the CBN to redesign the naira notes is a ‘necessary step’ for the good of the economy.
Moghalu averred his support for the decision in a series of tweets on his Twitter account on Friday.
He explained that the CBN is trying to gain control over the money supply in the economy.
“I fully support the Central Bank’s redesign of the Naira,” he said. “If 80% of banknotes in circulation are outside the banks, that’s troubling. The CBN obviously wants to force all those notes back into the banking system. Those with the notes must surrender to get new ones or else it becomes illegal tender after January 31 2023.
“This is also a way to withdraw currency from circulation, an unorthodox way of tightening the money supply since the country is battling high inflation.
“The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.
“I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well as impact of the security crisis on food price inflation. But overall it is a necessary step.
“I just think the time window for its implementation is rather short. This will put a lot of operational pressure on commercial banks and the financial system in general. A 90-day window would have been better, but one can understand the need to avoid interfering with the elections.”
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