Food importation: What Buhari directives could cost Nigeria’s economy

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Mixed reactions have continued to trail the directive by President Muhammadu Buhari that the CBN should restrict foreign exchange to importers of food item in the country.

According to the President, the directive was given to improve agricultural production and attain full food security in Nigeria.

While much emphasis has been placed on whether the move is an apparent breach of the CBN’s independence or not, some have asserted that the announcement might worsen the economy as Nigeria has neither achieved food security nor sufficiency.

According to experts, while FOREX restriction on food importation is laudable, the government needs to carefully work on the gradual implementation of the policy in order not to heap more misery on the economy.

Reacting to the policy, a former Deputy Governor of the CBN, Kingsley Moghalu, reacted that the issue isn’t whether or not CBN should allow access to Forex for food imports. According to him, it is about whether such an economic policy should be imposed by a political authority. Moghalu said, “Our economy will not be saved by Ad Hoc political decisions like this, handed down by the very institutions that should be shielded from the whim and caprice of politicians.

According to Food and Agriculture Organization (FAO), although agriculture remains the largest sector of the Nigerian economy, employing two-thirds of the entire labour force, production hurdles have significantly stifled the performance of the sector.

As it stands, Nigeria occupies a tripartite position. FAO reported that Nigeria is the continent’s leading consumer of rice; the country is one of the largest producers of rice in Africa and simultaneously one of the largest importers of rice in the world.

A close look into the National Bureau of Statistics (NBS) foreign trade report shows that Nigeria still imports food items that gulp trillions of naira. According to the Bureau, between 2015 and 2018, Nigeria imported food and beverages estimated at N5.46 trillion or $17.8 billion. As at first quarter of 2019 only, Nigeria’s food and beverage importation stood at N389 billion or $1.2 billion.

A further breakdown shows that Nigeria’s food imports are categorised into primary (raw) and processed. In Q1 2019, industries imported N196 billion worth of raw food, while households imported N87 billion.

According to the NBS, food items largely imported into Nigeria include prepared foodstuffs, vegetables, animals, vegetable fats and oil, other cleavage production and beverages.

No doubt, Nigeria’s agricultural sector is full of potential and there is a large room for growth. While the current administration has introduced several policies to help improve food security, not much progress has been recorded and the government should address this.

According to global hunger index (GHI) 2018, Nigeria ranks 103 out of the 119 qualifying countries with a score of 31.1. This means Nigeria suffers from a level of hunger that is very serious.

 A closer look at GHI report shows that Nigeria is worse off in hunger index between 2000 and 2018.

Nigeria’s fragile economy still manages to import more Agric. products than export. This means that the current domestic production cannot meet demands.

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