Food product imports gobbled up $14.05bn of the foreign exchange supplied by the Central Bank of Nigeria in the last five years, according to data obtained from the apex bank on Thursday.
The CBN’s breakdown of sectoral utilisation of forex showed that food imports accounted for about 13.12 per cent of the $107bn utilised for imports in the country from 2014 to 2018.
The apex bank, in June 2015, excluded importers of 41 goods and services, including some food products, from accessing forex at the nation’s foreign exchange markets in a bid to conserve the foreign reserves as well as encourage local production of those items.
The slump in crude oil prices in mid-June 2014 hammered government finances and the naira, causing chronic dollar shortages.
Following the forex restriction, the amount of foreign currency used for imports in the country plunged to $24.718bn in 2015 from $34.202bn in 2014. It further fell to $17.154bn in 2016 and $15.161bn in 2017 but rose to $15.87bn last year.
Forex utilised for food imports also dropped to $3.42bn in 2015 from $5.03bn in 2014. It dipped further to $1.79bn in 2016 and $1.51bn in 2017 but increased to $2.31bn in 2018.
The CBN said a total of $14.73bn was supplied into the forex market last year, adding that the supply figure included forex sold to Bureaux de Change operators which started from April 2006.
According to the data, $589.7m was used for food imports in the first quarter; $469.8m in Q2; $553.8m in Q3, and $692.5m in Q4.
In December 2018, the CBN included fertiliser on the list of 41 items classified as ‘not valid for foreign exchange’ in the Nigerian forex market.
The items are rice, meat and processed meat products, chickens, eggs, tomatoes and tomatoes paste, and vegetables and processed vegetable products.
The central bank said in July that it had restricted the sale of forex on the importation of milk from the Nigerian forex market.
“Arising from the success of the restriction policy, we approached some milk importers, like we did for rice, tomato and starch and asked them to take advantage of the CBN’s low-interest loans to begin local milk production instead of relying endlessly on milk imports,” it added.
Two weeks ago, President Muhammadu Buhari disclosed that he had directed the CBN to stop providing foreign exchange for importation of food into the country, based on “the steady improvement in agricultural production, and attainment of full food security.”
The President said foreign reserves would be conserved and utilised strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills.