…As FG says Foreigners taking over Nigeria’s agric sector***
Investments worth $10 billion has flowed into the country due the import prohibition policy imposed on 41 items, Godwin Emefiele, Governor of Central Bank of Nigeria ( CBN ) has said.
The Apex Bank boss made the disclosure before lawmaker at an interactive session by the Joint Committees joint House Committee on Finance, Appropriation; Aids, Loans & Debt Management and Budget Research on the 2018-2020 Medium Term Expenditure Framework/Fiscal Strategy Paper.
Represented by Adebayo Adelabu, CBN Deputy Governor on Operations, Emefiele said a reduction in inflation rate from 18.9% to a little above 15% has been achieved by key fiscal policies introduced by the present administration which were aimed at stabilizing the economy.
Local manufacturing of some of the prohibited items in the country including building materials such as granite, marble, among others, have been commenced by some companies established across the country, adding that this would generate employment for Nigerians.
The official exchange rate of N305/$ and the parallel market’s N360/$ have been stable over the past few months, he said. This was due to the intervention of the CBN in Agriculture, Solid minerals, manufacturing sectors and Petroleum sector which has been yielding positive results, he said.
The CBN and Federal Account Allocation Committee (FAAC) agreed that proceeds from the foreign exchange transaction would be remitted into the Federation Account for the three tiers of government to share, and reduce budget deficit.
Members,however took him to task on the bailout given to states and he said CBN does not bailout to state as provided in the CBN Act, 2007.
He added that since they cannot afford the high interest rate from commercial banks,mIntervention fund were given to critical sectors of the economy at single rate and was channeled through development financial institutions (DFIs).
However, Permanent Secretary of Federal Ministry of Finance, Mahmud Dutse, who respresented Kemi Adeosun, Minister of Finance requested the support of the National Assembly towards boosting the 20% independent revenue from government owned enterprises, saying there were plans to plan to sanction Chief Executives of agencies who fail to adhere to the policy.
He said Nigeria’s tax regime should be reviewed as it is one of the lowest in the world and less than one-third of Africa’s ratio.
He said in line with ECOWAS tariff policy, the only proposal for tax review applies to excise duties on alcohol and cigarette
Executive Chairman, Federal Inland Revenue Service (FIRS) Tunde Fowler, in his presentation p disclosed that total sum of N3.233 trillion was realsied over the past 10 months, an amount that represented 79.35 percent of its collection target for 2017 fiscal year.
The FIRS justification for 2018-2020 revenue framework, he said, was based on the Federal Government Economic Recovery and Growth Plan (ERGP).
He said its tax assessment between 2013 and 2015 revealed N1 trillion after its tax audit exercise based deployed technology which has aided the tax agency to increase its revenue.
Various measures have been adopted by FIRS the service to ensure increased collections of federal government dues in the corporate and individual taxes.
In the meantime, Foreigners are currently taking over Nigeria’s agricultural sector as a result of the excessively high interest rates being demanded from indigenous agriculturists by Deposit Money Banks, the Federal Government has said.
It also stated that the production and sale of crude oil could not salvage the country’s fragile economy, adding that revenue generation from oil was too low when compared to what some smaller countries were making from agro exports.
Speaking on the sidelines of a seminar organised in Abuja by the Danish Embassy in Nigeria on value development in the country’s food and agriculture sector, the Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, said the major challenge inhibiting the desired development of the country’s agricultural sector was poor access to finance.
Lokpobiri stated, “The major challenge bedevilling this industry is access to finance. Agricultural financing in Nigeria is too costly; for even at nine per cent you can’t find it. They will ask you for all forms of collateral, the CBN will say bring your father’s house, bring this, bring that.
“But if you have a company that is ready to support agro investors, then people will invest. If you have access to cheap funds, you will be able to invest on a long term basis. Instead of getting a loan from a commercial bank at 25 to 30 per cent, you can have it at two per cent and pay back in about 30 years. Here, you don’t have such funding. That is what we are talking about.
“And that is why if you look at it now, foreigners are taking over the agro sector here; either from India, they get it (loan) at three or four per cent, or from Europe at two or three per cent. But here, it is 30 per cent and they (banks) are not even willing to give. The only way you can compete with others is for you to have cheap funds that will reduce your production costs.”
Lokpobiri explained that the economic system being run in Nigeria over the years had made it possible for the banking sector to hold the country hostage with high interest rates, adding that this was why the government often borrowed less from the domestic market.
He said countries that invested in agriculture earned far better than Nigeria, adding that oil production would not salvage the country’s economy.
The minister added, “Nigerians shouldn’t think that we have oil and that oil is going to salvage this country. Countries that are investing in agriculture are getting much more profits than what we get from oil. Do we even get up to $30bn from oil? That is the point.
“Denmark, with a population of about five million people and less land mass than Nigeria, has a net agro export worth over €80bn. Now, ask yourself this question, how many billion dollars do we get from oil export? This clearly shows that there is more profit in agro investment than even in oil investment.”
Nation with additional report from Punch