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Malawi’s AGCOM set to boost Agri-business

$95 million set to turn around Malawi’s agriculture sector

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Huge sugar cane truck in the sugar fields in Malawi - AFP

In the next 6 years, Malawi’s Agriculture sector is expected to turn into big business.

 A US$95 million (about K70 billion) Agricultural Commercialization (AGCOM) Project to be bankrolled by the World Bank will make this possible

The initiative is an attempt to transform the agriculture sector into a high productive commercial division.

AGCOM National Project Coordinator, Dr. Ted Nankhumwa said the project aims to transform the subsistence orientation among small and medium scale farmers to commercial scale in order to increase productivity and promote diversification.

Nankhumwa added the project has put in place measures to increase both land and labour productivity value by ensuring that land which is tied to low-value crops, is released to strategic crops which will result into high agricultural production as well as diversification.

“AGCOM is also likely to create a well cushioned and resilient agriculture sector which has lately proven fragile to the impact of climate change and environmental degradation,” Nankhumwa said.

The project is expected to achieve the desired transformation through building of productive alliances which will support integration of small-scale farmers and emerging farmers into value addition chains.

It will also cover matching grants to farmers for increased production, yield, quality and sale of agricultural products, improve post-harvest storage and process capability

AGCOM would also provide a Partial Credit Guarantee Fund (PCGF) which will act as an incentive to commercial banks to provide competitively priced agriculture financing to small scale farmers who are usually viewed as a risky category.

Director of Agricultural Planning Services in the Ministry of Agriculture, Alex Namaona says the agriculture policy summarizes the success plan yet falls short of ideas to practical transformation which projects like AGCOM will provide.

Namaona observed that the idea of mobilizing farmers, training and linking them to better markets are aspects bound to promote high diversified and standardized production, a situation which is likely to result in commercialization.

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Zimbabwe declares interim RTGS dollar sole legal tender

The RTGS dollar was introduced in February 2019 as a first step towards a new currency by the year’s end

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Zimbabwe declares interim RTGS dollar sole legal tender
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Zimbabwe has adopted its interim currency as the country’s sole legal tender on Monday in a bid to stem black market demand for foreign currencies.

The RTGS dollar was introduced in February 2019 as a first step towards a new currency by the year’s end. This is a main part of President Emmerson Mnangagwa’s plan to stabilise an economy racked by inflation and widespread shortages.

According to the official statement, “the British pound, United States dollar, South African rand, Botswana pula, and any other foreign currency shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe”.

The latest variation of the domestic currency, the RTGS, has struggled to gain trust among large corporations and everyday Zimbabweans. Economic analysts fear 2009 may repeat itself with the interim currency.

Last week, the International Monetary Fund (IMF) requested that the central bank allows the RTGS to float freely so that exporters could sell dollars at the interbank rate rather than surrender them to the central bank

On the official interbank rate, the RTGS currency was pegged at 6.2 but on Monday, it traded between 11 and 12 against the dollar on the unofficial market.

But, Zimbabweans are complaining that goods and services are still being priced in other currencies. While more than 80% of Zimbabweans earn RTGS dollars, goods ranging from bricks to rentals, car parts and many groceries have their prices pegged in U.S. dollars.

Inflation has climbed to a decade high 97.86%, eroding salaries and savings and causing Zimbabweans to fear a return to the hyperinflation of 2008 when the rate reached 500 billion per cent.

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Nigeria’s central bank will keep controversial FX system

Emefiele added that the bank also hopes to continue working with the Deposit Money Banks to improve access to credit

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Nigeria's central bank will keep controversial FX system

The Central Bank of Nigeria (CBN) has announced its plan for the next five years. The current governor of the bank, Godwin Emefiele stated the five main focal points of his second term to drive the Monetary Policy roadmap throughout 2019-2024 at the CBN Headquarters in Abuja.

In his words, “our priorities at the CBN over the next 5 years are the following; preserve domestic macro-economic and financial stability; foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians, thereby raising the financial inclusion rate in the country”, he says.

Emefiele added that the bank also hopes to continue working with the Deposit Money Banks to improve access to credit for not only smallholder farmers and MSMEs, but also consumer credit and mortgage facilities for bank customers.

“Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry. This group deserves our encouragement. We shall also during this intervening period encourage our Deposit Money Banks to direct more focus in supporting the Education Sector”.

Related: Nigeria’s apex bank to offer seven-year loans to youth corps members

In addition to these, there is also a need to grow the country’s external reserves and lastly, support efforts at diversifying the economy through the various intervention programs in the agriculture and manufacturing sectors.

The CBN Governor said he was confident that when implemented, the aforementioned measures will help to insulate the economy from potential shocks in the global economy.

Related: Senate confirms Emefiele for second term as Nigeria’s Central Bank governor

“In my second term in office, part of my pledge is to work to the best of my abilities in fulfilling these objectives,” he adds.

Emefiele was first appointed by former President Goodluck Jonathan in 2014 and was retained after Buhari assumed office in 2015.

On May 8, President Muhmmdu Buhari informed the Senate in a statement that he had decided to nominate the CBN governor for a second term.

Related: Nigeria’s Central Bank governor named for second term

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West Africa Crude-Nigerian OSPs boost seller confidence

In Angola, around half a dozen cargoes remain for July loading, while the preliminary programme for August added another 45 cargoes

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West Africa Crude-Nigerian OSPs boost seller confidence
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Nigeria has increased its official selling price (OSP) for major crude grades on perked-up demand. Nigeria’s National Petroleum Corporation significantly raised the July OSP for major grades, Bonny Light 156 cents per barrel last month, to 204 cents and Qua Iboe, from 171 cents per barrel, to 215 cents.

The move shows the new confidence in Nigerian barrels of oil has been selling to Europe in June, due to shortfalls hitting competing North Sea fields. But at least, 20 cargoes remain for July loading, as preliminary August programmes were awaited imminently.

In Angola, around half a dozen cargoes remain for July loading, while the preliminary programme for August added another 45 cargoes.

China’s Unipec is still offering West African cargoes on the Platts Window after doing so for several grades last month, partly to attract market attention due to slow demand and also to offload unwanted crude.

Asian refining margins for 10 parts per million (ppm) gasoil, a key middle distillate refined from heavier Angolan barrels, slipped on Friday as crude prices rose, a sign that Asian demand for heavier West African (WAF) crude may remain sluggish in the interim.

Finalization of state oil company, Sonangol’s term allocations was expected, with sellers keen to see price markdowns for later selling of July cargoes to be continued into August. But as China draws down stocks of Iranian crude it bought in bulk in April ahead of U.S. sanctions, traders say Angola might be sought after especially as new commercial tanks are expected to come online very soon.

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