Daily Watch – Senator seeks textiles import ban, CBN advances ₦610.4bn loans to farmers

The International Air Transport Association has asked the Nigerian government and other governments in Africa to address charges being slammed on airlines. The association said that airlines operating in these countries lose an average of ₦554 ($1.54) on every passenger they carry as the airlines in the region were burdened by excessive charges, which accounted for 11.4 percent of their operating costs. Data from the Federal Airport Authority of Nigeria showed that local airlines transported 2.56 million passengers on 42,905 flights in the first quarter of 2019, which means that local airlines lost ₦1.41 billion in the first quarter of the year. Alexandre de Juniac, the IATA president, speaking at the 51st annual general assembly of the African Airline Association in Mauritius, said user charges account for 11.4% of airlines’ operating costs in Africa and a plethora of taxes and charges, some unique like relevance fees, hydrant fees, railage fees, royalty fees, and even solidarity taxes. According to de Juniac, flying should be an economic lifeline for Africa and not a luxury, hence he advised that it is critical for governments to understand that every extra cost they add to the industry reduces aviation’s effectiveness as a catalyst for development.

A Senator wants the importation of textiles to be banned for at least five years following the ban placed on rice and poultry imports. This move, according to Senator Kabir Barkiya (APC, Katsina Central) is expected to increase the local production of textiles. However, other senators said that local textile manufacturers lacked the right resources to take control of their industry. The textile industry also lacks power supply and credit facilities, they opined. Barkiya referenced a period when the textile industry could boast of 140 companies and had several employees in the sector and said the industry recorded an annual growth of 67 percent and as of 1991, employed above 25 percent of the workers in the manufacturing sector. The industry declined following the closure of Kaduna Textile, Kano Textile, and Aba Textile industries, he said. In his remarks, Senate President, Ahmed Lawan cited the importance of the Africa Continental Free Trade Agreement and stressed the need for the country to embrace competition rather than cut trade ties due to the repercussions involved.

The CBN says it has released a total of ₦610.4 billion to commercial banks for farmers under the Commercial Agricultural Credit Scheme. According to the regulator’s economic report for the third-quarter report on the performance of the CACS, a total of ₦1.21 billion in loans was guaranteed to 9,752 farmers under the Agricultural Credit Guarantee Scheme. This represented an increase of 41.7 percent above the level in the preceding quarter but was 14.6 percent below the level in the corresponding quarter of 2018. The ₦610.4 billion was for 593 projects while the total amount repaid since inception stood at N368 billion at end-June 2019, compared with ₦338.4 billion. A subsector analysis showed that food crops received the largest share of ₦595.5 million, 49 percent guaranteed to 5,436 beneficiaries; mixed crops got ₦221.8 million, 18.3 percent guaranteed to 2,472 beneficiaries; while livestock had N174.5 million, 14.4 percent guaranteed to 690 beneficiaries. The monetary regulator added that cash crops, fisheries and ‘others’ got ₦106.5 million, 8.8 percent, ₦84.4 million, 6.9 percent, and ₦31.5 million 2.6 percent guaranteed to 629, 321 and 204 beneficiaries, respectively.

Countries within the ECOWAS sub-region have started rejecting Nigerian cargoes, apparently, as a form of retaliation against the land border closure of the country. This is coming despite revenue increases the Nigerian Customs Service said it has achieved with the on-going partial border closure. The Vanguard quoted exporters as saying that the border closure is gradually crippling their businesses. The CEO, Multi-mix Academy, an export-oriented institution, Obiora Madu, said that Nigerian exports within the ECOWAS region are decreasing due to the border closure. No figure was, however, given to determine the extent of the loss. Unlike before the FG’s action, exporting generally is becoming difficult as cargoes are now undergoing careful examinations before leaving the shores of the country. This, he said, has also impacted negatively on the volume and speed of export. The CEO, Institute of Export Operations and Management, Ofon Udofia, gave instances using both Unilever and Dangote Industries, which supply goods to the Benin Republic, looking for alternatives to transport these cargoes. Udofia said the waterways are not yet feasible as Nigeria doesn’t have any national vessels that ply the West African Coast, and added that the cost of shipping these goods will increase as the International shipping lines will be triggered to charge extra cost for shipments.