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Bakers Halt Bread Production Thursday Over Skyrocketing Costs

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Bakers under the aegis of the Premium Breadmakers Association of Nigeria have announced plans to halt production of their products, effective Thursday.

According to a statement signed by the President of the association, Emmanuel Onuorah, operating a bakery in Nigeria has become almost impossible as the incessant increases in the prices of baking materials and diesel have affected the industry negatively.

Onuorah said bakeries were running in losses and the situation was no longer sustainable.

According to him, bread is a staple food and one of the cheapest ‘grab and go’ food that is available for both the poor and the rich.

READ ALSO: Bread Producers Threaten Strike Over Bakery Materials’ Price Hike

“It, therefore, behoves the Federal Government to be mindful of this and ensure the survival and sustainability of the industry,” he said.

The statement read in part, “In a move to ensure the survival of the premium bread-making industry in Nigeria, we have decided to embark on a withdrawal of services beginning from Thursday 21st of July, 2022 for four days in the first instance and where there is no intervention from the government, we shall escalate the duration of the withdrawal.”

“The reasons for the withdrawal of services included an incessant increase in the price of baking materials, Federal Government’s 15 per cent wheat development levy on wheat import, NAFDAC’s N154,000 penalty charged for late renewal of certificates, the inability of its members to access grants and soft loans being given by the Central Bank of Nigeria to Micro, Small and Medium-Scale Enterprises and multi-agencies regulation of the bread-making industry.”

The statement further read, “Our efforts to ensure the survival of the industry led to a series of meetings with the Federal Ministry of Industry, Trade and Investment, Abuja with our sister association in the bread-making industry in 2021. Our best attempts through the suggestions we put forward for the survival of the bread-making industry have not yielded the desired result.

“Therefore, the withdrawal of service is the only way we believe we can use to get to Federal Government and Nigerians and let them know our plight and how difficult it has been with the bread-making industry in Nigeria.”

Last month, the Association of Master Bakers and Caterers of Nigeria via a communique issued, and signed by the association’s executives, led by Mansur Umar, had declared that it would embark on two-week strike action in response to skyrocketing prices of baking materials.

An economic expert and associate professor of Economics at the Pan-Atlantic University, Lagos, Olalekan Aworinde, believes the Nigerian government has become lethargic towards addressing certain critical issues plaguing the economy. This, he said, had made strike action the last resort for interest groups who desire to be heard.

Aworinde said, “If they shut down, it tells us that the poverty rate in Nigeria will continue to increase because bread is one of the common foods that individuals eat every day. Hardly will you see any household that doesn’t eat bread.

“That tells us that it will be difficult for people to put food on their table when bread is not available. It also tells us that the price of bread is also likely going to increase because their going on strike is to show that there is a possibility of also increasing the price of their product.

READ ALSO: Hunger Looms As Bakers Set To Shut Down Industry Nationwide

“Aside from that, there are also the workers. There are workers that work in these bakeries and are paid daily. That tells you that the level of unemployment is likely going to be on the increase and that we are likely going to have some social ills in the country. We are likely going to see an increase in armed robbery because when people are not gainfully employed, the tendency is that they will turn to armed robbery.”

A consumer, Chinedu Michael, who spoke with The PUNCH on the possible impact of the strike said while the need to adjust to other possibilities would be inevitable, the absence of bread on the shelves would impact negatively on personal finance.

He said, “Most people eat bread. There’s almost no alternative to bread. So obviously it will require a big adjustment to survive without it.”

The Executive Secretary, Flour Mill Association of Nigeria, Yunus Olalekan, did not respond to calls as of the time of filing this report.

PUNCH

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CBN Sells Fresh Dollars To BDCs At N1,021/$

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The Central Bank of Nigeria (CBN) started fresh and direct sales of US dollars at N1,021 per dollar to Bureau De Change operators.

Nigeria’s apex bank disclosed this in a circular signed by its Director of Trade and Exchange Department Hassan Mahmud.

“We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1,021/$1. The BDCs are in turn to sell to eligible end users at a spread of NOT MORE THAN 1.5 percent above the purchase price,” the circular posted on its website read.

READ ALSO: Tinubu Unveils African Counter-Terrorism Summit

“ALL eligible BDCs are therefore directed to commence payment of the Naira deposit to the underlisted CBN Naira Deposit Account Numbers from today, Monday, April 22, 2024, and submit confirmation of payment, with other necessary documentations, for disbursement of FX at the respective CBN Branches.”

CBN’s move is coming as the naira is recording a slight depreciation against the dollar after weeks of gains.

In late March, the bank also sold $10,000 to each of the eligible Bureau De Change (BDC) operators in the country at the rate of N1,251/$1.

READ ALSO: Mixed Reactions Trail Video Of Couple’s Customised N200 Notes

Like in the most recent sales, it warned BDCs against breaching terms of the dollar sales, vowing to sanction defaulters “including outright suspension from further participation in the sale”.

The fortunes of the naira have fallen sharply since President Bola Tinubu took over in May. Inflation figures have reached new highs and the cost of living hitting the rooftops.

Nigeria’s currency slid to about N1,900/$ some months ago at the parallel market. But in recent weeks, it has gained against the dollar.

The Nigerian authorities have also doubled down on their crackdown against cryptocurrency platform Binance and illegal BDCs.

On March 1, the CBN revoked the licences of 4,173 BDCs over compliance failures.

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JUST IN: FirstBank Gets New MD/CEO

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Olusegun Alebiosu has been appointed as the Acting Managing Director/Chief Executive Officer of First Bank of Nigeria Limited (FirstBank Group), effective April 2024.

Alebiosu steps into this pivotal role from his previous position as the Executive Director, Chief Risk Officer, and Executive Compliance Officer, a position he held since January 2022.

Alebiosu brings to the helm of FirstBank over 28 years of extensive experience in the banking and financial services industry. His expertise spans various domains including credit risk management, financial planning and control, corporate and commercial banking, agriculture financing, oil and gas, transportation, and project financing.

READ ALSO: JUST IN: Access Holdings Names New Acting CEO

Having embarked on his professional journey in 1991 with Oceanic Bank Plc. (now EcoBank Plc.), Alebiosu has held several notable positions in esteemed financial institutions.

Prior to joining FirstBank in 2016, he served as Chief Risk Officer at Coronation Merchant Bank Limited, Chief Credit Risk Officer at the African Development Bank Group, and Group Head of Credit Policy & Deputy Chief Credit Risk Officer at United Bank for Africa Plc.

Alebiosu’s academic credentials further enrich his professional profile. He is an alumnus of the Harvard School of Government and holds a Bachelor’s degree in Industrial Relations and Personnel Management. Additionally, he obtained a Master’s degree in International Law and Diplomacy from the University of Lagos, as well as a Master’s degree in Development Studies from the London School of Economics and Political Science.

READ ALSO: Meet Newly Appointed Union Bank CEO

A distinguished member of various professional bodies, including the Institute of Chartered Accountants (FCA), Nigeria Institute of Management (ANIM), and Chartered Institute of Bankers of Nigeria (CIBN), Alebiosu is renowned for his commitment to excellence and ethical practices in the banking sector.

Beyond his professional endeavors, Alebiosu is known for his passion for golf and adventure. He is happily married and a proud parent.

With Alebiosu’s appointment, FirstBank of Nigeria Limited anticipates continued growth and innovation under his leadership, reinforcing its position as a leading financial institution in Nigeria and beyond.

 

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CBN Gives New Directive On Lending In Real Estate

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The Central Bank of Nigeria, CBN, has released a new regulatory directive to enhance lending to the real sector of the Nigerian economy.

The directive, issued on April 17, 2024, with reference number BSD/DIR/PUB/LAB/017/005 and signed by the Acting Director of Banking Supervision, Adetona Adedeji, signifies a notable shift in the bank’s policy towards a more contractionary approach.

In line with the new measures, the CBN has reduced the loan-to-deposit ratio by 15 percentage points, down to 50 per cent.

This move aligns with the CBN’s current monetary tightening policies and reflects the increase in the Cash Reserve ratio rate for banks.

READ ALSO: JUST IN: CBN Gov Sacks Eight Directors, 32 Others

The LDR is a metric used to evaluate a bank’s liquidity by comparing its total loans to its total deposits over the same period, expressed as a percentage.

An excessively high ratio may indicate insufficient liquidity to meet unexpected fund requirements.

All Deposit Money Banks are now mandated to adhere to this revised LDR.

The CBN has stated that average daily figures will be utilised to gauge compliance with this directive.

Furthermore, while DMBs are encouraged to maintain robust risk management practices in their lending activities, the CBN has committed to continuous monitoring of adherence and will adjust the LDR as necessary based on market developments.

READ ALSO: JUST IN: CBN Increases Interest Rate To 24.75%

Adedeji has called on all banks to acknowledge these modifications and adjust their operations accordingly. He emphasised that this regulatory adjustment is anticipated to significantly influence the banking sector and the wider Nigerian economy.

The circular read in part, “Following a shift in the Bank’s policy stance towards a more contractionary approach, it is crucial to revise the loan-to-deposit ratio policy to conform with the CBN’s ongoing monetary tightening.

“Consequently, the CBN has decided to decrease the LDR by 15 percentage points to 50 per cent, proportionate to the rise in the CRR rate for banks.

“All DMBs must maintain this level, and it is advised that average daily figures will still be applied for compliance assessment.

“While DMBs are urged to sustain strong risk management practices concerning their lending operations, the CBN will persist in monitoring compliance, reviewing market developments, and making necessary adjustments to the LDR. Please be guided accordingly.”

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