Implications of Proposed Tomato, Milk Importation Ban for the Economy

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Tomato sellers

In this piece, James Emejo writes that the proposed decision by government to ban the importation of tomato products and milk into the country could be yet another turning point in its diversification agenda

Determined to strengthen the economy following a negative growth of 1.5 per cent in Gross Domestic Product (GDP) in 2016, the President Muhammadu Buhari-led administration had evolved the Economic Recovery and Growth Plan (ERGP) for the period 2017–2020.

The plan among other things mapped out government’s strategy for achieving sustained and inclusive growth by focusing on economic recovery in the short-term, and structural reforms aimed at diversifying the economy to return it on a path of sustained and inclusive growth over the medium to long-term.

Before now, many people believed government was only paying lip service to the issue of diversification partly because there was no substantial proof in terms of job creation in the non-oil sector and as oil revenue continued to dominate government’s fiscal strategy and food import bill continued to exert huge pressure on the country’s external reserves.

Worried by the development and the need to pursue self-sufficiency in food production as well as diversify the economy, the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, took a bold initiative in June 2015 to excluded importers of 41 goods and services, which the country had comparative advantage of producing locally from accessing foreign exchange at the Nigerian foreign exchange markets, in a determined effort to encourage local production of these items.

Although his decision was initially met with fierce criticisms from largely those who benefitted from importation of these items, it has now gradually been established that the CBN governor’s move was the best for the economy and was long overdue.

Though the 41 items, now 42, with the recent addition of fertiliser to the list, are not banned or prohibited outrightly by the CBN, importers are no longer qualified to access forex from the CBN or the official market to buy these items from overseas.

Emefiele, had recently disclosed the various initiatives embarked upon by the apex bank to encourage domestic production, had resulted in the country’s monthly import bill falling significantly from $665.4 million in January 2015, to $160.4 million as at October 2018, representing a drop by 75.9 per cent and an implied savings of over $21 billion on food imports alone over that period.

The CBN’s intervention in agriculture, particularly the Anchor Borrower Programme (ABP), which has caused an unprecedented revolution in local rice production, leading to massive employment generation in the sector had been severally applauded.

Apart from saving the country huge amount of forex, especially at a time when the reserves had witnessed fluctuations occasion by drop in oil prices in recent times, the ban on the now famous 41 items had also encouraged more people to embrace farming given that it has now been de-risked to a large extent by the CBN- with thousands of direct and indirect jobs created till date.

It was based on the successes recorded from the restriction of forex to the banned items that the CBN governor recently hinted that tomato products import will soon be placed on full ban by 2020, given the ongoing revolution in the tomato industry in the country.

He believes Nigeria has all it takes to be self sufficient in tomato production.

Speaking recently in Kaduna during an inspection tour of Gino Tomatoes Farm, which is a subsidiary of GBfoods Africa,

Emefiele reiterated the need to ban tomato importation and further hinted at consideration to also prohibit the importation of milk into the country.

Commenting after inspecting the farm and its processing facilities, the CBN boss who was accompanied by the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, wooed other investors to tow the path of Dangote and Gino Farms to invest massively in tomato production in order to be self sufficient as well as export and attract foreign exchange into the country.

He commended President Muhammadu Buhari for insisting that “it is time we produce what we eat and eat what we produce.”

He said the tomato and milk sectors had enormous potentials, which could translate into massive job opportunities for the teeming unemployed population.

According to Emefiele, we should just be grateful to God that we are in a position where we are witnessing these things and many more would happen.

“Whether we like it or not, as long as we are producing this for our consumption and possibly for export, there is no choice other than to ban this.

“And there are various other products as well. I keep talking about milk: before I was born 60 years ago, milk was being imported into the country and I have told WAMPCO that look, we need to come back.”

He said: “What does it take to produce milk; is it not to fatten the cow, give it water, give it the necessary nutrients and it will produce milk for you.

“Yet, they say milk cannot be produced in Nigeria. We will confront it and I think they also should get ready to join in this train.”

He said tomato farmers had further assured that “If we continue this programme in a very tenacious manner, that in two years, Nigeria will not only be self-sufficient in producing these tomatoes, we will also begin to export tomatoes and I am sure.

“We want to ask other people who are interested, to please join. Join and let us earn foreign exchange from exporting tomatoes rather than spending foreign exchange importing tomatoes into Nigeria.”

Meanwhile, Emefiele’s affection for the development of agriculture has been coveted by stakeholders who meant well for the economy especially farmers who continued to attest to the benefits of the apex bank’s intervention.

Ogbeh, particularly commended the CBN governor for refusing to cave in in the face of mounting opposition in some quarters to abandon his desire and commitment to diversifying the economy through laudable interventions in the agricultural sector.

According to him, the CBN has been pushing the agriculture programme with direct support by funding through programmes in the Ministry of Agriculture.

“People have called him (Emefiele) names and criticised him. But if he had not devised the means of bypassing the mountains of obstacles confronting production in this country, by today, the story of Nigeria would have been a horrible one.”

Supporting the ban of tomatoes and all items which could be locally produced, the minister said: “In a short while, I assure you we will stop anybody importing tomato paste into this country.

“It is going to happen faster than people think. So, let the smugglers beware; production not smuggling; production not importation – definitely not importation of what we can produce.”

He added: “Our children need to have jobs; our farmers need to have jobs. Farmers are entitled to happiness, good living and we have abandoned them in the bush for too long. Now that people are joining hands to give them life, we are most grateful.

“And we believe the future we have been dreaming of is here. And go tell Nigerians that tomatoes are being grown here on a scale which in a short while, will make us exporters not importers of tomato products.

“Our target is two years from now, no more import of tomato products, simple.”

No doubt the restriction of forex on tomato, milk and others relevant agricultural produce will offer tremendous opportunity for diversification of the economy, and significantly reduce unemployment and poverty in the country.