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Kenya, Japan companies in $620 million deals for auto assembly and eco-energy

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Kenya has committed to many agreements with Japanese companies, notably the Toyota Tsusho Corporation, geared towards investments in car assembly and renewable energy worth up to Ksh99 billion ($620.7 million).

Kenyan President, William Ruto, posted on social media that “in Tokyo, Japan, I witnessed the signing of the Framework Agreement for Collaboration between Kenya and Toyota Tsusho Corporation and later toured the Toyota Motamachi Factory.

“The pact entails Ksh15 billion ($94 million) in Meru Wind Farm Energy, Ksh8 billion ($50.2 million) Isiolo Solar Energy, Ksh800 million ($5 million) in Thika Kenya Vehicle Manufacturers (KVM)’s initial investment, Ksh75 billion ($470.22 million) in Menengai Geothermal Plant and Electrified Vehicles promotion.”

President Ruto went on to say that talks, which he claimed were moving forward well, were being held with Toyota about the possibility of opening a car plant in Kenya in order to meet the country’s expanding demand for its goods.

“The manufacturing project would reduce the number of used vehicles we continue to import and create jobs for our skilled manpower. I am glad that Toyota Tsusho Corporation finds the project viable. We undertake to provide sufficient incentives to multinational automotive manufacturers to set up shop in Kenya,” Ruto said.

The Toyota agreement was first inked in October during the G7 Session of Trade Ministers in Osaka, Japan, between the Japanese company and the Kenyan government. The purpose of the agreement was to renovate the local assembly factory, whose production capacity had been restricted by budgetary limitations.

Trade Cabinet Secretary Rebecca Miano confirmed the agreement at the time, however she did not specify what Toyota planned to invest in.

“Noting that the Kenya Vehicle Manufacturers, one of the local automotive assembly facilities in Kenya, is experiencing financial difficulties, it was agreed that Toyota Tsusho, as one of the stakeholders in the industry, step in to save the facility from eminent collapse,” stated Miano last October.

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Nigerian govt ‘may open border for importation of cement’

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The Nigerian government has issued a warning to cement producers, stating that if they continue to raise prices arbitrarily, it may decide to open the border to cement imports.

This warning was given by Arc Ahmed Dangiwa, Minister of Housing and Urban Development, during an urgent meeting with cement and building material manufacturers on Tuesday in Abuja.

The government last week called for an urgent meeting with cement manufacturers following a recent surge in the price of the product, which has seen a bag of cement jump from N5,000 to as high as N15,000 in less than two weeks.

However, during his speech to the manufacturers on Tuesday, Dangiwa urged them to be more patriotic, pointing out that domestic sources, such as limestone, clay, silica sand, and gypsum, are used to produce cement rather than imports, and as such, they shouldn’t be valued in terms of dollars.

Dangiwa, who stated that the price of cement has increased and is unreasonable, also rejected the makers’ claim that the price increase was caused by petrol and the high cost of importing equipment.

This was in reaction to Salako James, the Association’s Executive Secretary, who had said that the association just heard of the  pricing from the market like every other Nigerian and did not discuss or decide the rates of specific enterprises.

“The challenges you speak of, many countries are facing the same challenges and some even worse than that but as patriotic citizens, we have to rally around whenever there is a crisis to change the situation.

“The gas price you spoke of, we know that we produce gas in the country the only thing you can say is that maybe it is not enough.

“Even if you say about 50 percent of your production cost is spent on gas prices, we still produce gas in Nigeria it’s just that some of the manufacturers take advantage of the situation. As for the mining equipment that you mentioned, you buy equipment and it takes years and you are still using it.

“The time you bought it maybe it was at a lower price but because now the dollar is high you are using it as an excuse. Honestly, we have to sit down and look at this critically. The demand and supply should be good for you because the government stopped the importation of cement, they stopped the importation in order to empower you to produce more.

“Otherwise if the government opens the border for mass importation of cement, the price would crash but you would have no business to do and at the same time the employment generation would go down. So these are the kinds of things you have to look at, the efforts of government in ensuring things go well.”

Following the elimination of fuel subsidies, the depreciation of the national currency, and low agricultural output, Nigeria is currently facing its worst cost of living crisis. These factors have all contributed to Nigeria’s highest headline inflation rate of 27% year over year and food inflation of 32%. The massive housing shortage facing the nation seems to have a new facet as a result of the recent increase in cement prices.

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Nigeria’s Q3 jobless rate rises to 5% after policy reforms 

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The figures issued by the National Bureau of Statistics (NBS) showed that the jobless rate increased from 4.2% in the previous quarter following the government’s elimination of the expensive petrol subsidy in May.

Nigeria’s jobless rate increased to 5% in the third quarter due to a crisis in the country’s cost of living. Among young people aged 15 to 24, the unemployment rate increased from 7.2% to 8.6%. Additionally, urban unemployment increased slightly from 5.9% to 6% in the prior quarter.

With over 200 million citizens, Nigeria is the most populous country in Africa. However, decades of high unemployment have been caused by a population surge that has outpaced economic expansion.

However, once the government changed the formula for calculating the numbers in early 2023, the unemployment rate fell from a record 33% in the fourth quarter of 2020. With 87% of workers being self-employed, underemployment still exists. During that time, only 12.7% of people were employed for pay.

The NBS reports that the percentage of workers in the grey economy, or informal employment rate, remained relatively stable at 92.3%. Additionally, the workforce participation rate decreased somewhat to 79.5% from 80.4% in the second quarter.

President Bola Tinubu has defended his two main reforms, eliminating foreign exchange controls and subsidies, arguing that while these will cause hardships in the near run, they are essential to draw in investment and strengthen government coffers.

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