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Press focuses on effects of flooding, redesigned banknotes on agric sector

The assertion by the Nigeria Governors’ Forum that the 2022 farming season was a serious nightmare for most farmers in the country due to the challenges in the agricultural sector is one of the leading stories in Nigerian newspapers on Wednesday.The Punch reports that the Nigeria Governors’ Forum has described the 2022 farming season as a serious nightmare for most farmers in the country due to the challenges in the agricultural sector.

It added that the naira redesign policy of the Central Bank of Nigeria, excessive rainfall and flooding worsened the challenges facing farmers this year.

In a statement by the NGF on Tuesday, the governor said the challenges occurred despite the amount allocated to agriculture, which gave high hope to farmers and stakeholders in the sector.

The NGF also lamented that many families found it difficult to feed three times a day due to the challenges, adding that cuisines that some families hardly took became regular features in homes.

The statement was titled, ‘Nigerian Agriculture In 2022: The Ups And Downs,’ and signed by the Senior Agricultural Adviser to the NGF, Prof Abba Gambo.

The forum also pointed out the losses suffered by farmers due to the flooding occasioned by the excessive rainfall.

“The rains came much more than NiMET’s forecasts, leading to serious flooding across the country, affecting 34 out of the 36 states, with the FCT least affected. The floods led to massive loss of lives, livestock, properties and farmlands. The much-expected harvest in most states became a mirage. Jigawa State, being the most affected,” it added.

The newspaper says that a combination of high food prices and a strong dollar is negatively affecting people in Nigeria and other developing countries, a report by the United Nations Conference on Trade and Development has revealed.

According to the report, this combination is making many individuals living in these countries make hard choices to make ends meet, such as skipping meals or taking a child out of school.

It said this in its ‘A Double Burden: The effects of food price increases and currency depreciations on food import bills,’ report released in December.

It said, “The price of food has increased everywhere, reaching historic levels in 2022, as stated by the Global Crisis Response Group. 

“This is a challenge for food security globally, but particularly for net food importing developing countries. And unlike in previous food crises, they now face a double burden. They not only pay higher prices for the food they import, but the price increase is exacerbated by the depreciation of their currency vis-à-vis the US dollar.

“This erodes the fiscal space that many developing countries need to face the concomitant challenges of recovering from the COVID-19 pandemic, the cost-of-living crisis, and the climate emergency. This note assesses the potential effect of high prices of wheat and concurrent currency devaluations on the import bills of selected developing countries.”

The organisation explained that the world had suffered three major food price spikes in the current century. The first two were in 2007-2008 and 2010-2012, with a third one currently because of the COVID-19 pandemic and the war in Ukraine.

It stated that during the first two price spikes, the value of the dollar went down.

It said, “The depreciation of the US dollar and the consequent appreciation of other currencies made imports cheaper and provided some ease to food import bills for many developing countries.

“However, the current price spike is different. In an attempt to combat high inflation in the United States of America, the Federal Reserve increased its interest rates causing the US dollar to appreciate some 24 per cent between May 2021 and October 2022. This made the US dollar and the food that developing countries buy with it more expensive.”

According to UNCTAD, developing countries face a double burden of high food prices and the depreciation of their local currency against the dollar, and with national budgets stretched thin, net food importers are in a vulnerable position.

The Punch also reports that the Federal Government has said it will soon announce salary increments for civil servants and public officials due to the steady increase in the prices of consumer goods.

This was as it said a Presidential Committee on Salaries is currently reviewing salaries with a plan to announce its decision in early 2023.

The Minister of Labour and Employment, Chris Ngige, disclosed this to State House correspondents after a closed-door meeting with the President, Major General Muhammadu Buhari (retd.) at the Aso Rock Villa, Abuja.

The PUNCH reports that Ngige had earlier insinuated that the Federal Government would review salaries of civil servants upwards to cushion the effect of inflation.

Fielding questions on the issue, he said, “Yes, that’s what I am saying, that the Presidential Committee on Salaries is working hand-in-hand with the National Salaries Incomes and Wages Commission. The commission is mandated by the Act establishing them to fix salaries, wages, and emoluments in not only the public service.

“If you want their assistance and you are in the private sector, they will also assist you. They have what is called the template for remuneration, for compensation. So, if you work, you get compensated, if you don’t work, you will not be compensated.

“So they have the matrix to do the evaluation, so they are working with the Presidential Committee on Salaries chaired by the finance minister and I’m the co-chair to look at the demands of the workers. Outside this, I said discussions on that evaluation are ongoing.”

Asked about a workable timeframe for the implementation of salaries under review, the former governor said “As we enter the New Year, the government will make some pronouncements in that direction.”

Ngige revealed that he was at the State House to brief the President on the activities of his ministry for the year 2022.

The Guardian says that two years after the world’s largest free trade area became operational with much fanfare on January 1, 2021, the implementation of the single continental market has been delayed for several reasons, from the COVID-19 pandemic to the lack of agreement on the rules of origin for some product lines and the failure of 10 out of the 54 signatories to ratify it.

Though several African nations have started trading a trickle of goods under the African Continental Free Trade Area (AfCFTA) agreement via the pilot phase, tariff and logistics challenges hobble trade, with preference still for trade partners outside the continent.

Under the AfCFTA agreement, cross-border taxes on 90 per cent of goods are supposed to fall at the latest by 2030, although the tariffs on numerous products will be phased out even earlier.

But tariffs are only one of the many barriers to trading across Africa. Logistics is another major hurdle, considering that three-quarters of Africa’s goods are carried on roads, which are often poorly built.

According to the African Development Bank, this increases the cost of logistics on the continent, which can add 75 per cent to the price of African goods.

Nigeria’s trade in goods with the rest of Africa in about five years stood at N15.85 trillion, data obtained from the National Bureau of Statistics (NBS) have shown.

The figure covers 2018 till September this year. The value translates to 9.3 per cent of the country’s total foreign trade in the period, underscoring the low level of intra-African trade.

In the same period, the value of the country’s trade with members of the Economic Community of West African States (ECOWAS) averaged N1.42 trillion yearly, bringing the sum for the period to N7.09 trillion or 4.2 per cent of the total trade in the period.

Nigeria’s foreign trade was estimated at N170.27 trillion in the timeframe, with exports slightly higher at 52.6 per cent share of the nominal value.

The regional trade in the period reviewed was dominated by Nigeria, which aligned with the historical trend. Of the N15.85 trillion regional trade, exports totaled N12.76 trillion or 80.5 per cent, while the country imported a paltry N3.09 trillion value of goods.

Also, goods brought into the country from other ECOWAS countries through official routes in the period accounted for 7.5 per cent of the trade value. The value was N528.6 billion whereas the country’s exports to the neighbouring countries were over 12-fold (N6.36 trillion).

The low intra-regional trade, as underpinned by the NBS figures is low, its growth is also anaemic at best and mostly retrogressive. For instance, in 2019, the figure grew by almost 80 per cent to N5.03 trillion only to slump by 44.7 per cent the following year. Last year saw the value of trade between the biggest regional economy and other African countries improved slightly (6.6 per cent).

As at September, the value was N2.28 trillion, putting the annualised estimate at N3.04 trillion, which will be about 2.5 per cent higher than last year’s performance.

The African Regional Integration Index does not reflect efforts to push the single market and free-movement agenda in past decades, with foreigners said to be able to move more freely in the region than Africans themselves.

Averaging 0.383, trade integration on the African continent tends towards the lower rungs of the score ladder, the index said. It adds that Africa has the highest average import duties and the highest average non-tariff barriers in the world.

Nigeria has yet to finalise its tariff schedule as well as unveil guidelines and implementation strategy for the trade deal, raising concerns for the organised private sector.

Published on 05.05.2023

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