Amidst panic over the Ukrainian wheat export shortfall and its likely disruptive effect on the global food supply due to Russia’s alleged deliberate attack and burnings of Ukraine’s wheat fields, analysts estimate that the territorial warfare plot, though not a small fry, may not be as economically downtrodden as it is currently being conceived. According to Forbes, Russia’s torching of wheat fields in Ukraine may not be inflicting the market disruption and food insecurity that Moscow desires.

Forbes’s reporter, Eric Tegla, reported that Russia’s naval control of the black sea and its off-again and on-again grip on the snake island has thwarted Ukrainian wheat exports. This is corroborated by a statement made by the United State’s secretary of State, Anthony Blinken, who was reported to have estimated that 20 million tons of Ukrainian grain is sitting in the locked Silos outside the Black Sea port of Odesa, and more is waiting on ships blocked from leaving Ukraine’s key strategic Port. The American diplomat was reported to have expressed his belief that Russian President, Vladimir Putin’s deliberate aggressive control of grain shipment is political blackmail to deflect responsibility and get the world to cow to his threats and end the sanctions on Russia.

According to the United Nations Food and Agriculture Organisation’s wheat price index, wheat prices have increased by 45 percent in the first 3 months of 2022 compared with the previous year. The Global production of wheat, rice, and other grains is forecast to reach 2.78 billion tons in 2022 from 2.94 billion produced in 2021.

According to a 2022 United States Department of Agriculture report, Russia and Ukraine are the first and seventh largest exporters of wheat in the world respectively, and both countries account for nearly one-third of the world’s wheat and barley export. However, ‘’since the beginning of the war, Ukraine has only been able to export 1.5 million to 2 million tons of grains a month down from more than 6 million tons a month previously’’ Joseph Glauber, senior researcher at the International Food Policy Research Institute in Washington was cited by Forbes.

Reuters News reporter, Pavel Polityuk, cited the Ukrainian agriculture ministry as saying Ukraine’s grain export in the first seven days of July was down by 30 percent year on year at 402,000 tonnes. The reporter added that the government remarks Ukraine can expect to harvest 50 million tonnes of grains this year compared with a record of 86 million tonnes in 2021 because of the loss of land to Russian forces and lower grain yield

Since Russia’s attack, some Ukraine grains are being rerouted through Europe by rail, road, and rivers but it’s a small quality compared with the Sea route. However, the Russian Foreign Minister, Sergey Lavrov, has noted that Ukraine’s wheat exports could restart if the country removes mines in the Black sea and agrees that arriving ships can be checked for weapons by the Russian authorities.

According to Forbes’ Tegla, the blockade goes on as does the apparent burning of Ukrainian wheat. But if this year’s Russian and Western harvests prove to be bountiful, Putin’s leverage using food supplies may not be as strong as he’s hoped and the global backlash will surely be stronger

The Foundation for Investigative Journalism (FIJ) Nigeria raised a concern that the increasing price of bread in Nigeria could be adduced to the current political tension between Russia and Ukraine. According to FIJ Nigeria, food security remains under threat due to Russia’s invasion of Ukraine, and Nigeria has been hit hard as a result. Citing April 2022 report by Statista, FIJ reporter, Joseph Adeiye, states that the price of bread in Nigeria is currently pegged at $1.14 compared to other African countries where a loaf of bread is sold for less than $1. The reporter fears that the cost of bread, wheat flour, pasta, maize, barley, and other derivatives will continue to rise and supplies will dwindle.

Turkey has been the mediating country between Russia and Ukraine since the former sent its armed forces into the latter on February 24. The last peace talks between representatives of Russia and Ukraine were held in March ending 2022. However, according to Reuters News, a fresh round of negotiation between Russia, Ukraine, Turkey, and the United Nations over grain exports from Ukraine would take place on Wednesday, 13 July 2022 in Istanbul.

I beg all qualified Nigerians to get their PVCs and vote in 2023. If you do not vote, the nation may enter a phase that would become irreversible. Sudan went down on bread: “Sudan’s fallen ruler, Omar al-Bashir, won many fights for three decades. He mastered the politics of UN. He overcame America and South Sudan. He triumphed over IMF and World Bank. He fought rebels, friends and enemies – and won. But at the end, he fell because of BREAD. Yes, bread – so simple and harmless- brought down one of the last surviving yoyo men of Africa.”

In Sri Lanka, Gotabaya Rajapaksa ruled but in the end, lack of fuel, even for people to drive their cars, brought the mess home. He fell. 

In Nigeria, sovereign debt is loading: “The World Bank said Monday that Nigeria has failed to meet full disclosure rating conditions on debt reporting for three consecutive years, adding an ugly remark to the nation’s unpleasant debt story.

Nigeria’s public debt stock has risen significantly in the last five years as the country battles economic headwinds emanating from covid-19 and poor fiscal policies. Nigeria’s total public debt stock stood at N41.60 trillion or $100.07 billion as at March 31, 2022, according to data from Debt Management Office (DMO).

The report said the World Bank has in the last three years been monitoring how transparent Nigeria is in its debt reporting practices and found that it did not meet “full disclosure” policy it set for International Development Association (IDA) countries.”

2023 is our last chance to reverse the miry clay- trajectory. If we do not get it right, sovereign debt will force Nigeria to enter into severe paralysis. IMF projects that by 2026, 100% of the national revenue will go into servicing debt. In short, the money we spend on servicing  debts in Nigeria, every year, can fund 100% of our education and healthcare sectors as they exist. People, we can suddenly have zero money for anything but servicing debts in Nigeria! Have you got your PVC, yet?

The International Monetary Fund (IMF) has warned that debt servicing may gulp 100 percent of Nigeria’s revenue by 2026, if the government fails to implement adequate measures to improve revenue generation.

The IMF’s Resident Representative for Nigeria, Ari Aisen, disclosed this while presenting the Sub-Saharan Africa Regional Economic Outlook report on Monday, 30th May 2022 in Abuja.

Comment on LinkedIn Feed

Comment: “If we do not vote, the nation may enter a phase that would become irreversible.”
But we have always voted, prof. What’s the difference this time?

My Response: You have not voted actually. Lagos registers 5m out of 10m qualified and only 1m vote on election day. Is that voting using 1/10 to decide the future?

Nigeria Fails World Bank’s Debt Disclosure Rating

The World Bank said Monday that Nigeria has failed to meet full disclosure rating conditions on debt reporting for three consecutive years, adding an ugly remark to the nation’s unpleasant debt story.

Nigeria’s public debt stock has risen significantly in the last five years as the country battles economic headwinds emanating from covid-19 and poor fiscal policies. Nigeria’s total public debt stock stood at N41.60 trillion or $100.07 billion as at March 31, 2022, according to data from Debt Management Office (DMO).

The report said the World Bank has in the last three years been monitoring how transparent Nigeria is in its debt reporting practices and found that it did not meet “full disclosure” policy it set for International Development Association (IDA) countries.

“Global studies indicate that debt transparency directly contributes to higher credit ratings, lower borrowing costs, and foreign direct investment (FDI) inflows. Hence, the debt management office took the strategic stance to focus on debt transparency efforts and took several actions to improve public debt reporting and disclosure,” it said.

The Washington-based financial body said that Nigeria failed to publish Annual Borrowing Plans (ABP), adding that guaranteed and non-guaranteed debts were not reported while information on recently contracted loans was also not provided.

The World Bank said these are indicators that Nigeria did not meet the “full disclosure” rating for every single one of the nine categories on the debt transparency Heat Map.

According to the financial organization, debt transparency Heat Map involves data accessibility; instrument coverage, sectoral coverage, information on the contracted loans, periodicity, time range, debt management strategy, annual borrowing plan and other debt statistics/ contingent liabilities (CLs).

Nigeria has been borrowing internally to meet its budget shortfalls. Domestic borrowing accounts for more than 70% of the country’s total debt, including the central bank’s Ways and Means Advances that has topped N19 trillion, according to data from the DMO.

Ways and Means Advances is a loan facility through which the Central Bank of Nigeria finances the government’s budget’s shortfalls.

While there is growing concern over Nigeria’s rising public debt, whose servicing is currently taking about 95% of the country’s revenue, the Ways and Means Advances has become another cause for alarm.

The CBN admitted that the Federal Government’s borrowing from it through the Ways and Means Advances could have adverse effects on the bank’s monetary policy to the detriment of domestic prices and exchange rates.

“The direct consequence of central banks’ financing of deficits are distortions or surges in monetary base leading to adverse effect on domestic prices and exchange rates i.e. macroeconomic instability because of excess liquidity that has been injected into the economy,” it said on its website.

Last November, the World Bank also warned the Nigerian government against borrowing from the CBN to finance budget deficits, saying it puts fiscal pressures on the country’s expenditures. In addition, borrowing from the CBN through the Ways and Means Advances will increase the cost of debt in Nigeria, the World Bank said.

We won the US$60,000 Mhagic Velocity Prize as the best Business School for Entrepreneurs in Africa; excited to use that moment on this piece. It reminds us of the power of vision and innovation. Good People,  Tekedia Institute is excited to announce that we’re adding more topics or expanding existing courseware in the following programs:

1. Tekedia Startup Masterclass: from Startup to Unicorn
2. Tekedia Practice with Internship (agribusiness, digital tech, new energy tracks)
3. Tekedia Industries (agribusiness, digital tech, new energy tracks)

The topics are as follows:

1. Starting a business: key legal components (Nigeria, USA): examines critical legal issues including founders agreement, NDA,  etc.
2. Fundraising for Startups and new businesses: explains pitch deck, fundraising narratives, cap table, term sheet, etc.
3. Building the first version of your product
4. How to listen to customers
5. Go-to-market and influencer marketing strategies
6. How to hire your startup initial technical staff

The courseware will go live on Monday, July 18, 2022 in the Board. We continue to welcome feedback on areas members want the Institute to deepen materials.  Many sample documents like founders agreement, SAFE agreement, etc are already in the Board. You can learn more about Tekedia programs here; we are the best business school for the mastery of entrepreneurial capitalism in Africa.