The Central Bank of Nigeria, CBN, has been directed to henceforth stop providing funding support for food import into the country.
President Muhammadu Buhari, who gave the directive hopes to use the measure to improve on domestic food production and achieve food security.
Nigeria, which has Africa’s biggest economy, is the continent’s top oil producer and relies on crude sales for around 90 per cent of it foreign exchange but low oil prices led to a recession in 2016 from which the country emerged two years ago.
Since Buhari first took office in 2015, Nigeria’s central bank has presided over policies aimed at stimulating growth in the agricultural sector to reduce dependence on oil. Those policies included a 2015 ban on access to foreign exchange for 41 items that the bank felt could be produced in Nigeria.
A statement by presidential spokesman disclosed that the president issued the directive to the CBN, to stop providing foreign exchange for importation of food into the country.
“Don’t give a cent to anybody to import food into the country,” Buhari said, according to the statement, which said that the call was in line with efforts to bring about a “steady improvement in agricultural production, and attainment of full food security”.
“The foreign reserve will be conserved and utilised strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills.”
The latest move comes only weeks after Central Bank Governor Godwin Emefiele in July said the bank would ban access to foreign exchange to import milk.
However, the directive has raised questions about the Banks independence.
“The central bank act of 2007 makes it clear that the bank is independent. It is not supposed to be taking direct instructions from politicians,” said Kingsley Moghalu, who served as deputy central bank governor from 2009 to 2014.
“The trajectory in this administration is that we have seen a very clear tendency for the president to direct people. Increasingly Nigeria’s institutions have lost independence,” said Moghalu, who was a contender in February’s presidential election.
Bismarck Rewane, an economist and the head of Lagos-based consultancy Financial Derivatives, also said the bank was supposed to be independent, reports Reuters.
Reuters also said that a central bank spokesman did not immediately respond to phone calls and text messages seeking comment.
Buhari has been a vocal supporter of such restrictions and one of his first moves after his re-election in February was to reappoint the central bank governor.
Rewane said a curb on foreign exchange for food imports could backfire after Buhari last month signed up to the African Continental Free Trade Agreement (AfCFTA). That deal seeks to create a continent-wide free trade zone where tariffs on most goods would be eliminated.
“At this point in time these rules will be manipulated in the interest of smugglers and their accomplices,” said Rewane.
Import controls on rice, imposed even as local farmers fail to meet demand, have kept prices artificially high and led to smuggling from neighbouring Benin into Nigeria.
The President, who hosted All Progressives Congress (APC) governors to Eid-el-Kabir lunch at his country home in Daura, said the foreign reserve will be conserved and utilized strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills.
“Don’t give a cent to anybody to import food into the country,’’ he said.
Buhari, noted that some states like Kebbi, Ogun, Lagos, Jigawa, Ebonyi and Kano had already taken advantage of the Federal Government’s policy on agriculture with huge returns in rice farming, urging more states to plug into the ongoing revolution to feed the nation.
“We have achieved food security, and for physical security we are not doing badly,’’he said.
President Buhari said he was particularly delighted that young Nigerians, including graduates, had started exploring agric-business and entrepreneurship, with many posting testimonies of good returns on their investments.
He said the incoming ministers will be “taught’’ and thoroughly guided to ensure they meet the targets of the APC-led government for the people, with regular monitoring of their performances and scaling up of targets by the Office of the Secretary to the Government of the Federation (OSGF).
The President assured that he will attend the Presidential Policy Retreat organized for the ministers by the OSFG, and insisted on compliance with laid down targets on key sectors of the economy that will directly impact on the livelihood of Nigerian.
In his remarks, the Chairman of the Nigerian Governors’ Forum and Governor of Ekiti State, Dr John Kayode Fayemi, said the President’s sense of justice, fairness and forthrightness had turned a major inspiration to governors on the way forward for the country.
He said the challenges faced by states “were enormous’’, but the governors had remained undaunted, assuring the President of strong support and “the very best effort’’ to overcome all the obstacles.
The Chairman of the Progressive Governors Forum and Governor of Kebbi State, Alhaji Atiku Bagudu, appreciated the President for the unique leadership style of maintaining a healthy relationship with governors on individual and collective basis, pointing out that they had been “energized’’ to do more in their states.
The governor commended the President for making bold and courageous efforts to reposition the economy for majority Nigerians through inclusive policies.
The country is more secure than in 2015, and the country is more prosperous than in 2015 because you are working for the majority of the people,’’ he added.
The governor said the party had been repositioned, after the 2019 elections, to work for the benefit of the majority of Nigerians, noting that “there will two elections this year and we need to work towards winning the two states.’’