Data obtained from the Central Bank of Nigeria (CBN) has shown that the implementation of the ‘no forex for food import’ directive could save $20 billion for the economy.
President Muhammadu Buhari on Tuesday ordered the CBN to exclude importers of food items from accessing forex from official windows.
According to a CBN source, Nigeria saved around $21 billion in 2018 following the restriction of forex on 41 items. “With the addition of cotton, textile and garments, poultry, palm oil and their derivatives and other food/agricultural items imported into the country, it is expected that Nigeria will save more forex from the directive.
The National Bureau of Statistics (NBS) in its report said “the value of total imports rose 3.39 per cent in the first quarter of 2019 compared to the fourth quarter of 2018, and by 25.84 per cent over the corresponding quarter of 2018. From this figure, Imported Agricultural products were 7.98 per cent higher in value than in the fourth quarter of 2018, and 28.1 per cent higher than in the first quarter of 2018.
If these imports that consume forex is checked as directed by the President, an immediate benefit of the directive will be an accretion to the foreign reserve which now stands at over $44 billion. This increase in foreign reserve will help keep the Naira at an appreciable rate to the dollar and the CBN will be better equipped to defend the naira against forex volatilities.
Another positive implication of the directive is that there will be increased agricultural activities across all food segments to produce the basic needs and also all the value chains associated with every food item will be motivated to expand. In other words, jobs and processes that were exported will now be domiciled in Nigeria. A fall out is more jobs and more food for Nigerians.
While it has been reported that the Central Bank of Nigeria (CBN) will implement the directive in phases in order to manage the impact on prices and inflation, this decision by apex bank will give respite to nursing mothers who rely heavily on imported milk to feed their babies and for Nigerian companies to develop more acceptable infant formula than what currently obtains.
CBN Governor Godwin Emefiele, while delivering the keynote address at the 53rd Annual Bankers’ Dinner of the Chartered Institute of Bankers (CIBN) in Lagos last year, noted that there was 97.3 per cent cumulative reduction in monthly rice import bills, 99.6 per cent in fish, 81.3 per cent in milk, 63.7 per cent in sugar, and 60.5 per cent in wheat.
Emefiele insisted that “If we continue to support the growth of smallholder farmers, as well as help to revive palm oil refineries, rice mills, cassava and tomato processing factories, you can only imagine the amount of wealth and jobs that will be created in the country.
“These could include new set of smallholders farmers that will be engaged in productive activities; new logistics companies that will transport raw materials to factories, and finished goods to the market; new storage centres that will be built to store locally produced goods; additional growth for our banks and financial institutions as they will be able to provide financial services to support these new businesses; and finally, the millions of Nigerians that will be employed in factories to support processing of goods.
Former Attorney General of the Federation ( AGF) and Minister of Justice Chief Mike Aondoakaa commended Buhari for the ban on food importation into the country. Aondoakaa stated that the directive was coming at the right time when the country had achieved food security.
He urged the people to eat made-in-Nigeria food so that farmers would have value for their products.
The former AGF, who is a rice farmer with one of the biggest rice milling plant in Makurdi, stated that agriculture is a huge employer of Labour and the ban on food importation will increase participation in Agriculture and many will now see it as a Big business.
He urged the youths who are looking for white-collar jobs to embrace farming now.