Stakeholders Seek Clarifications on Forex Ban for Food Imports

Hajia Saratu Aliyu
  • MAN, LCCI, others caution FG

James Emejo in Abuja, Dike Onwuamaeze and Chris Uba in Lagos

Stakeholders, including the Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI) and Nigerian Association of Chamber of Commerce, Industry, Mine and Agriculture (NACCIM) wednesday sought clarifications on President Muhammadu Buhari’s directive to the Central Bank of Nigeria (CBN) not to allocate foreign exchange to food import.

While welcoming the directive, they, however, warned that a wholesale implementation of it could hurt the economy since some food items are used as industrial raw materials.

They, therefore, said the government should be specific on the food items to be prohibited.
Buhari had said on Tuesday that he had directed the CBN to stop providing foreign exchange for food importation in order to improve agricultural production and attain full food security.

He did not, however, specify the items to be banned, indicating a blanket ban on food importation into Nigeria.
Buhari’s pronouncement has strengthened the CBN Governor, Mr. Godwin Emefiele’s, efforts towards the revival of the agricultural sector in line with the present administration’s agenda to diversify the economy from oil.

The CBN currently has about 43 items that are not eligible for foreign exchange at the official windows.

Reacting to the presidential directive, the Director General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadiri, said the government should be specific, especially regarding the prohibited items excluded from foreign exchange allocation.
“For instance, there are food items that are required as raw materials. Are they also banned?” he queried, adding that the CBN should seek more clarifications from the president.

According to him, the objectives behind the Buhari’s pronouncement is to conserve the foreign exchange spent on the importation of food, adding that anything done to protect the local economy is in the right direction.

In his reaction, the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said the president made a general statement as he did not specify the agricultural imports that should be prohibited.

“What food items is he talking about? He should be specific on the food items he is talking about,” he said.
According to him, although some items are already on the Exclusive List with the CBN, the president should list the food items he wants banned.

Besides, the LCCI director general said the president’s statement had implications for the nation’s monetary policy, which is the responsibility of the CBN.

“It is not good for the nation’s monetary policy; we should not worsen the existing instabilities and uncertainties in the economy,” he said, adding that the statement is not good for investment, job creation and private sector capitals.

He stated that for the good of the country, policies should be studied carefully before they are implemented, adding: “We need to be careful in order not to scare investors, including the existing investors.”

LCCI also called on the federal government to be wary of making hasty policy pronouncements that could scare away investors.
Yusuf said policy statement like this could create uncertainty in the country’s investment environment.

He charged the government to clarify what it meant by food importation because it used food in its generic form, noting that this has become necessary because some food items serve as inputs needed by manufacturers to produce goods.

“Already, food inflation has been higher than core inflation due to challenges in domestic food supply. We have security challenges affecting farming communities. There are also domestic transport challenges. We are also faced with low domestic productivity as most of our farmers still depend on hoes and cutlasses with little technical inputs. We need to address these challenges before we can begin to talk about internal food security as the president claimed.

“We also need to support agro processing which is manufacturing and farmers to increase their productivity,” Yusuf said.
However, the President of the LCCI, Nigerian Association of Chamber of Commerce, Industry, Mine and Agriculture (NACCIMA), Hajia Saratu Aliyu, said the president’s pronouncement was in the right direction and in the economic interest of Nigeria.

The NACCIMA president said efforts by both the federal government and the association to attract young Nigerians to farming business is beginning to yield positive results given the increase in agricultural produce.

When viewed against this backdrop, “it will not be proper for the country to begin to import the same products into the country.
“Only those food items we do not currently produce should be imported,” she added.

She said what the federal government could do now was to provide the environment for the local farmers to enable them to put more efforts, adding that NACCIMA has been making efforts to encourage and sensitise local farmers.
Also, several experts including farmers’ groups have applauded the latest decision by Buhari to deny food importers access to foreign exchange.

The National President, Rice Farmers Association (RIFAN), Alhaji Aminu Goronyo, said all farmers’ groups have lauded the pronouncement and committed to ensuring the country achieves food security.

He said: “It is not a new thing at all as the Central Bank of Nigeria (CBN), in the last four years, has not been issuing forex to most of the essential commodities that were being imported into the country.

“For over four years, rice and other commodities, including maize, had not enjoyed any support from the CBN to import them into the country. So, this is not a new thing; nevertheless, it is a welcome idea as Nigeria in no distant time will be self-sufficient in all commodities going by this instruction from the president.

“It is a welcome idea and all the commodities associations in Nigeria welcome the idea and we have tightened our belts to make sure we do not fail the president in this laudable effort he has made to stop taking our money to foreign countries in the name of food items.”
Vice President, Nigeria Agri-business and Group/Chairman, Best Foods, Dr. Emmanuel Ejewere, lauded the president’s decision.

“I think what the president was saying is that to ensure food security, we must take such actions as to be self-reliant. If we are self-reliant then we can achieve food security and what is happening here is that we have become a nation of importers and exporting jobs to people.

“There is no way we can go into the future in an economy that is agriculture-driven if we do not take this decision that we have taken. So, the president took a wise decision and it is positively risky but I believe that it would work because the Nigerian agriculture community is just waiting for this kind of injection and it has come in and I support it absolutely and I commend the president for this courage,” he said.

Also, Chairperson of the Association for Small Scale Agro Producers in Nigeria (ASSAPIN), Hajiya Amina Bala Jubrin, lauded the move by Buhari, adding, however, that efforts should be geared towards creating a conducive environment for agricultural producers to thrive.

“For me as a farmer, it is a right step in the right direction. It is high time Nigerians started patronising Nigerian products.
“My only take on this is that the federal government should take a giant stride in supporting or creating favourable conditions for producers such as bringing in machinery at a subsidised price for farmers to be able to afford.

“Like in the case of milk, our livestock products should be enhanced to have good breeds of cows: they can promote artificial insemination that would have our local breeds inseminated with the semen of the exotic breed so that if we don’t have at least 75 per cent, at least we can have 50 per cent, which is better than allowing our cows that can give 1 litre or 1.5 litres of milk. We should start getting cows that can give us at least 10 litres per day.

“These are some of the things the federal government can do. It is not necessary that our people have to go out and start bringing in every type of cow into this country and feed us with them. It is high time we produced our own,” she told THISDAY in a telephone interview.

To the Nigeria Employers’ Consultative Association (NECA), president Buhari’s order to CBN was a laudable initiative, but “the timing leaves much to be desired.”

Director General of NECA, Mr. Timothy Olawale, commended the president and the federal government for its numerous efforts at ensuring food sufficiency in Nigeria and protecting local farmers.

“We note most especially the ‘Agricultural Promotion Policy’ championed by the federal government through the Federal Ministry of Agriculture and Rural Development since 2016,” he said.

According to Olawale, “though the recent thrust towards withdrawal of forex for imported foods is laudable and welcome, the timing calls for concern.

“While in the long run, with consistent support and policy stability, local food production might meet demands and also provide foreign exchange through exports, the reality, however, is that we presently lack the capacity for sufficient food production to meet local demand.”

Enumerating the implications of the withdrawal of forex for food importation, the NECA boss said “a wholesale immediate withdrawal of forex without giving a buffer period for businesses to adjust and source for alternatives will only breathe life to the unresolved monstrous smuggling activities with serious consequences for the economy.

“And with the recently signed AfCFTA, Nigeria will further create a thriving market for other countries and remains a dumping ground for imported goods.

“Also, the argument of conserving foreign exchange through the withdrawal or ban of forex for food importation is not tenable.”