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The Central Bank of Nigeria says it will add Sugar and Wheat to its Forex restriction list. This was in a tweet posted on the handle of the apex bank on Friday. Ayodeji Balogun, CEO of AFEX Commodities Exchange and Femi Oladehin, Partner for Investment Banking at Argentil Capital Partners join CNBC Africa to discuss the implications of this story and how it affects Nigeria&#8217;s backward integration plans for these crops.

Nigeria to add sugar

Nigeria to add sugar, wheat to FX restriction list

By Gashaw Tadesse Abate, Tanguy Bernard, Alan de Brauw and Nicholas Minot*



Small-holder farmers in sub-Saharan Africa often experience lower yields, and efforts to increase them have sprouted throughout Africa. Many farmers fail to adopt modern inputs or farming techniques that would increase productivity due to several constraints,such as lack of available technology, limited liquidity, high perceived risk,constrained access to information, and poorly functioning output markets.Initiating reforms given this background is a slow process. Any new intervention to address these concerns, however, dramatically raises the expectation of national governments, and undervalues modest but significant gains from such interventions.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">Ethiopia provides a clear example of agricultural underperformance, as the country’s wheat production has consistently lagged other African nations. In 2012, Ethiopia’s wheat yields were 29 percent below neighboring Kenya, 13 percent below the African average,and 32 percent below the global average.</blockquote>



To help address these shortcomings, Ethiopia’s Agricultural Transformation Agency introduced the Wheat Initiative in 2013, a package intervention programme designed to boost wheat yields through improved inputs and procurement.In <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/agec.12425">recent IFPRI research</a>, published in Agricultural Economics, we examined the impact of the Wheat Initiative on farmers’yields, which provides important lessons for how programmes can boost yields in underperforming areas.



The Wheat Initiative provided a package of three broad interventions to 2,000 farmers across 41 woredas, or districts, in the four-major wheat producing regions in Ethiopia. Interventions included better access to improved inputs such as certified wheat seed, fertilisers, and gypsum to improve soil structure and enhanced techniques focused on lowering seeding rates, row planting, and balanced fertiliser use.Additionally, it included a government commitment to buy farmers’ wheat at or above the market rate to reduce marketing risk to farmers. The Initiative first worked with lead farmers to promote the new package, and then other farmers would learn about both types of inputs and techniques that would improve their wheat productivity.



To measure the impact of the Wheat Initiative, 504 potential lead farmers were randomly allocated into three separate groups; one received the entire package programme, one accepted market assistance only, and a control group. All three were informed of there commended new techniques and inputs, but only one group received them at a subsidized rate. We found that the group that received the full package programme had a 14 percent increase in yields. If such a result was uniform across the entire country, the yield increase would translate into additional half million tons of wheat!



While these findings represented a significant positive change, this growth was smaller than the Ethiopian government’s expectation, which hoped for doubled yields. It is likely the difference between expectations and actual results may underestimate the true change associated with the technology because of incomplete adoption of there commended practices. For example, 39 percent of farmers chose not to adopt row planting completely, due to the implicit cost of additional labor to row plant. Changing material input rates when they are made available is not particularly difficult, whereas changing farmer behavior takes significantly more time.



Nonetheless, important lessons for both intervention design and policy can be gleaned from this study. A drawback of using a package approach, an intervention with several components,is the difficulty in determining which is the true catalyst of yield improvements. The findings represent a substantial improvement in wheat production. If the package was adopted by all wheat farmers as lead farmers did in the trial, and average gains remained the same, aggregate wheat production in Ethiopia would rise by 600 thousand metric tons, nearly the size of Ethiopia’s net wheat imports! So, the key then is for governments or other practitioners to remain engaged, spreading interventions like this one, while taking a long-term perspective for these interventions to bear fruit.



<a href="https://www.ifpri.org/profile/gashaw-tadesse-abate">*GashawTadesse Abate</a> is a research coordinator; <a href="https://www.ifpri.org/profile/tanguy-bernard">Tanguy Bernard</a> and <a href="http://www.ifpri.org/profile/alan-de-brauw">Alan de Brauw</a> are senior research fellows; and <a href="http://www.ifpri.org/profile/nicholas-minot">Nicholas Minot</a> is the deputy division director, Markets, Trade and Institutions division of the International Food Policy Research Institute (IFPRI). The article was <a href="http://news.trust.org/item/20181009121749-iyntu/">originally published</a> by the Thomson Reuters News Foundation.

Op-Ed: Ethiopia’s wheat yields are among the worst in Africa, this is what it is doing to change this

Ahmed Aboulenein | CAIRO
Egypt, the world&#8217;s largest importer of wheat, has procured 2.33 tonnes of wheat from local farmers since its harvest began in mid-April, the supply ministry said in a statement on Sunday.
The ministry said it would provide a premium to farmers of 15 Egyptian pounds ($0.83) per tonne for wheat stored and transported in jute bags and 10 pounds per tonne for wheat stored in silos located far from production areas with over 50 percent empty storage capacity.
Egypt consumes 9.5 million tonnes of wheat to make its subsidised bread &#8211; 4 million tonnes from the local harvest and 5.5 million tonnes from imported wheat.
The local harvest runs through July but the supply ministry has said it plans to continue making international purchases this year to boost the country&#8217;s strategic reserves.
($1 = 18.1000 Egyptian pounds)
(Writing by Ahmed Aboulenein; Editing by Tom Finn and Mark Potter)
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Egypt procures 2.33 mln tonnes of local wheat since start of harvest

A fairly routine expenses scandal fits into a story of grand corruption amid austerity in a way that illustrates some important political dynamics in Egypt. On Friday, August 19, television﻿ journalist Mostafa Bakry revealed that Supply Minister Khaled Hanafy had been occupying a suite at the five-star InterContinental Cairo Semiramis hotel since February 2014, for a total bill of 7 million Egyptian Pounds (E£7m).﻿
“If one night in the suite costs E£10,000 and the minister&#8217;s salary is E£30,000 per month, who is paying?” Bakry asked rhetorically.
Hanafy explained on Saturday, August 20, that he paid his own bill and that where he chooses to stay was a private matter. He did concede, however, that he had a responsibility to reassure Egyptians that he had not spent State funds on the hotel.
Hanafy’s explanation rings hollow, more especially in light of a far more serious scandal that surrounds his department.
Since July a parliamentary committee of enquiry has been looking into fraud in the wheat sector, historically an attractive one for crooks because of a complicated subsidy system that has enabled those with the right connections to profit massively. Some industry officials told the committee that as much as two million tonnes of the five million bought for the current harvest may have been fictitious, with corrupt entities in charge of operating silos having pocketed the connected subsidies without actually storing any grain.
A much-touted high-tech monitoring system purchased from Blumberg Grain, a US service provider, was not operational in time for the current year’s imports. A second phase of the Blumberg System was rejected by the government’s Holding Company for Silos and Storage, while Blumberg lobbied cabinet for the rest of the project to go ahead.
Hanafy said in July that he had done an inspection and that only 4% of the value of the harvest was missing.
The committee’s final report is being reviewed by Parliament, and if its estimate that “there is more than one million tonnes missing” (in the words of Yasser Omar, a legislator on the committee) is correct, then that will mean Egypt will have to buy yet more wheat this year.
These scandals around the importation of Egypt’s most crucial basic food item come at a sensitive time: government is busy negotiating a deal with the International Monetary Fund (IMF) that will unlock $12bn in loans over three years, but which involves cuts to public spending that will have serious effects on living standards.
Subsidies are being cut yet further, a value-added tax (VAT) is in the works, and the public sector wage bill will need to be slashed. Shortages of foreign currency have pushed importers to buy hard currency at black market rates, and this has pushed inflation to 14% y-o-y in June and July. 
From an economic point of view, the dynamics set out above will tend to constrain the demand side, and this will keep happening as prices go up further in the wake of the currency devaluation   expected before the end of the year, and government implements the measures the IMF imposes.
From the political risk point of view, the environment is one in which our measure of legitimacy risk is negative: people are watching as they get poorer. Corruption perceptions are extremely important in such an environment.
Hanafy’s scandals give the clear impression that he has made money essentially taking food from poor people. Such scandals will tend to accelerate the decline in support for President Abdel Fattah Al-Sisi’s government. It would be good for stability Hanafy were sacked, but we have long had concerns over grand corruption in Sisi’s authoritarian government, and expect to hear more stories like this, especially if State-owned entities are privatised in terms of the IMF deal. Each story like this increases political risk.﻿

wheat

Nigeria to add sugar, wheat to FX restriction list

Op-Ed: Ethiopia’s wheat yields are among the worst in Africa, this is what it is doing to change this

Egypt procures 2.33 mln tonnes of local wheat since start of harvest

OPINION: Egypt – Hanafy's hotel, the wheat scandal and the IMF deal

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wheat

Nigeria to add sugar, wheat to FX restriction list

Op-Ed: Ethiopia’s wheat yields are among the worst in Africa, this is what it is doing to change this

Egypt procures 2.33 mln tonnes of local wheat since start of harvest

OPINION: Egypt – Hanafy's hotel, the wheat scandal and the IMF deal

News Tips

Advertise With Us

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