Industry stakeholders have called for further clarification on the recent pronouncement by President Muhammadu Buhari that Nigeria has attained food security, and as such, the Central Bank of Nigeria (CBN), should not extend access to foreign exchange (forex) for food importation.
They maintained that there is a need for government to clarify what constitute food items, saying a blanket ban on forex for food importation will lead to increase in food prices and high inflation rate.
Experts, who spoke to The Guardian, yesterday, in Abuja, also argued that a general restriction will send a wrong signal to not only consumers, but also manufacturers and investors, and will encourage smuggling of food items.
The Managing Director of Tiger Foods Limited, Don Ebubeogu, noted that there are still a lot of raw materials that are classified as food items, and denying access to forex will lead to increase in prices of food in the country.
He said: “Although the restriction is a good initiative, but there is the need to classify what is referred to as food, and until such clarification is made they cannot sum up the pronouncement; so we are still expecting clarification on it.”
Also, the Chief Executive Officer, Sahara Farms, Sulaiman Dikwa, said on the face value, it’s a step in right direction, but because the nation is yet to fix the value chain it will only increase smuggling, as companies will always patronise countries with cheaper prices of food.
In regards to the claim of Nigeria achieving food security, Dikwa said it seems President Buhari is being fed with the wrong information about food production, noting that while a lot of progress has been made to increase the nation’s food basket, but it is yet to attain food security.
According to him, companies are still importing a lot of food crops because of high cost of food production in Nigeria. For instance, a tonne of paddy rice in Thailand is $80, while in Nigeria its $280, saying that is why smuggling is difficult to curb.
Agreeing, the Nigerian Employers’ Consultative Association (NECA), said the ban will pose serious consequences for the economy, as the country will now become a dumping ground for imported food items through the recently signed, African Continental Free Trade Agreement (AfCFTA).
The Director-General of NECA, Timothy Olawale, who said the initiative will encourage the attainment of some level of food security, however, said Nigeria presently lacked the capacity to produce sufficient food to meet local demand.
Olawale argued that immediate withdrawal of forex without giving a buffer period for businesses to adjust and source for alternatives is not tenable, noting that this will decapitate those businesses, thereby leading to loss of jobs, or relocation of such businesses to neighbouring countries, where they can, without hindrance, bring the products into Nigeria under the cover of the AfCFTA.
He said: “Rather than a blanket knee-jack withdrawal of forex on food importation, and indeed milk importation, as announced by the government, a gradual withdrawal with a buffer period of not less than five years should be given.
“This will ensure the proper and strategic implementation of government’s ‘Agricultural Promotion Policy’ that was established less than five years ago. It will also enable government resolve the myriads of challenges facing the food production value chain such as the terrible distribution system for fresh foods, post-harvest losses due to lack of storage system and the security challenges and confrontation between farmers and herdsmen.”
Similarly, the National President of the National Association of Nigerian Traders (NANTS), Ken Ukaoha, applauded the President for the initiative, saying such pronouncements is needed to discourage capital flight, improve the domestic environment for investment, and allow people to embrace local alternatives to curb inflation, and create employment.
Although he admitted that there is no empirical evidence to ascertain that Nigeria has attained food sufficiency, as insurgency in the North East, herders and farmers’ crisis in Benue and other states, and banditry in the North West, including kidnapping have hampered the nation’s food production.