Nigeria’s late-night brief on economic shifts and social dynamics

Welcome back to 234Digest. I’m Samuel Okocha, and even though it’s 2:25 AM in Nigeria, we’re rolling out the second edition of our newsletter. Targeted for Saturday, we’ve spilled into early Sunday—but there’s no rest for the dedicated. After our Wednesday debut, we’re keeping the momentum with bi-weekly dispatches, bringing you the latest from Nigeria’s economic landscape.

Up first: Nigeria welcomes GB Foods tomato processing factory

Nigeria has inaugurated a new tomato processing factory and farm expansion in Kebbi State by GB Foods, a Spanish multinational food company, amid push to position the country as a fertile ground for business.

“This project exemplifies the kind of long-term investment we seek,” Nigeria’s Minister of Information and National Orientation, Mohammed Idris, said during the commissioning ceremony on March 8, according to a statement. “GB Foods’ belief in Nigeria is commendable, and they can count on our full support.”

The new facility, part of a 1,500-hectare farm, is set to become Africa’s largest integrated tomato project. It currently boasts a 620 metric-tonnes per-day processing capacity, with plans to double this in the next phase. Notably, 70% of the farm’s 5,000 workers are women, a fact highlighted by the Minister as a positive narrative for Nigeria.

President Bola Ahmed Tinubu, represented by Minister of Agriculture and Food Security, Senator Abubakar Kyari, expressed gratitude to Kebbi State for fostering a business-friendly environment. “This is a testament to the confidence in our leadership and Nigeria’s potential,” Kyari said.

Last year, GB Foods celebrated its 50 years presence in Nigeria and Africa. In 2020, the company opened a $51m tomatoes processing factory in Kebbi State. That same year, it launched a factory for making Mayonnaise in Ogun State.

The company, known for household brands like Bama, Jago, and Gino, is also intensifying its backward integration programme. This initiative is aimed at bolstering local sourcing of raw materials and minimizing import reliance, a move that could significantly benefit Nigeria’s economy.

“Our commitment to long-term investment spans the entire agricultural value chain,” CEO of GB Foods Africa, Vicenc Bosch, stated in a statement on February 29. “We aim to foster the development of the Nigerian economy and ensure shared value for all stakeholders involved.”

The event on March 9 was attended by dignitaries including Kebbi State Governor Dr. Nasir Idris, former Governor Atiku Bagudu, and the Spanish Ambassador to Nigeria, H.E. Juan Sell. GB Foods’ commitment to Nigeria is seen as a counter-narrative to reports of foreign investment decline, signaling a promising future for the nation’s agri-business sector.

Catch up: Expat levy on hold amid stakeholders dialogue

The Nigerian government has announced a suspension of the contentious Expatriate Employment Levy (EEL), which mandated businesses to pay $15,000 for a director and $10,000 for other expatriate workers annually. The levy, introduced by President Bola Tinubu over a week ago, faced immediate and widespread disapproval from the business community.

The Ministry of Interior declared the pause on the levy, citing the need for “dialogue among stakeholders” following a meeting in Abuja last Friday. The tax, initially aimed at “discouraging abuse” of the expatriate quota system, was also intended to foster “employment opportunities for Nigerians and close wage gaps between expatriates and local workers,” according to the ministry.

The imposition of the EEL had sparked significant backlash, with the Manufacturers Association of Nigeria (MAN) labeling the policy as “punitive” and a “punishment” for investors. “The policy will surely undermine the administration’s determination to position Nigeria as an attractive global investment destination,” MAN stated.

With over 150,000 expatriates working primarily in sectors such as oil and gas, construction, telecommunications, and hospitality, the levy’s suspension is a relief to many. Nigeria, one of Africa’s largest oil producers, relies heavily on these industries, which contribute to 90% of its foreign exchange earnings as per the International Monetary Fund. Currently, companies in Nigeria incur a cost of $2,000 annually to secure a residency permit for each foreign employee.

The Tinubu administration’s suspension of the EEL reflects a response to economic feedback. The controversial tax, aimed at businesses employing foreign workers, is now under review to balance foreign investment attractiveness with internal revenue generation.

No long talk

Kidnapping crisis: Nigeria acts: President Bola Ahmed Tinubu has deployed troops in a critical mission to rescue over 250 children abducted by gunmen in Kaduna State. The mass kidnapping not only poses a grave human rights issue but also has economic implications. Kidnappings in Nigeria have involved substantial ransom payments, impacting local economies and potentially deterring foreign investment due to security concerns.

Joshua’s knockout: A financial heavyweight: Nigerian-born British boxer Anthony Joshua scored a second-round knockout against former UFC heavyweight champion Francis Ngannou in Saudi Arabia. The victory was not just a sporting triumph but also a financial win. Securing a $50 million purse, Joshua’s win underscores the lucrative nature of high-profile boxing matches and their impact on athlete earnings and marketability.

Forex surge amid policy reforms: Foreign exchange inflows hit $2.3 billion last month, thanks to President Tinubu’s reforms. Investors are buying in, and remittances are up. The Central Bank of Nigeria’s measures to boost forex liquidity are showing positive results, with potential long-term benefits for the economy.

AfCFTA’s guided trade: Nigeria is gearing up to start formal exports under the AfCFTA’s Guided Trade Initiative next month. It’s a big step for local businesses, moving from informal to official trade channels across Africa.

Quote of the Day: “The best way to predict your future is to create it.” - Abraham Lincoln

That’s it for today. The next edition of this newsletter comes up on Tuesday. If’ you want it delivered straight to your inbox, subscribe here. Let’s keep the conversation going, no matter the time on the clock.