Economy

Forex Ban on Imported Foods by the Federal Government

President Muhammadu Buhari recently directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for importation of food into the country, noting the steady improvement in agricultural production, and attainment of food security.

According to the president, the foreign reserves will be conserved and utilized strictly for diversification of the economy, and not for encouraging more dependence on foreign foods.

The president further 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.

Since President Buhari first took office in 2015, Nigeria’s Central Bank has formulated policies aimed at stimulating growth in the agricultural sector to reduce dependence on oil. Those policies included a ban on access to foreign exchange for 41 items that the bank felt could be produced in Nigeria.

This latest directive by the president should be seen as a good development because Nigeria has been an import dependent nation for long. The country imports milk, rice, stock fish, vegetable oil, slippers, canned fish, tomato paste, refined petrol and even toothpick, which is not healthy for the nation’s economy.

This administration has been giving loans to farmers through the anchor borrowers programme and Nigeria now produces more than 90 percent of the rice it consumes. 

The Buhari administration has also been encouraging everyone to take up farming as an occupation so that the Nigerian economy can be less dependent on crude oil proceeds which account for around 90 percent of its foreign exchange.

Therefore, there is need to support the president’s desire for Nigeria to feed itself instead of depending on food imports from other countries, a practice that drains the country’s foreign reserves.

A restriction on foreign exchange for food importers is a good move for local food producers to grow, but it needs to be supplemented with additional policies to be effective.

Many Nigerians opt for foreign food items because agencies of government who should monitor and ensure quality of locally-produced goods are not effective.

Beyond encouraging the country to be more productive, there should be an enabling environment for local agriculture to thrive in. There should be strategic reserves and infrastructure in place.

The farmers further need support for better packaging; preservation and storage of their produce so that they do not sell them off at give-away prices during harvest seasons.

To effectively achieve food security, government should implement several strategies. Among them is the need to support local farmers with better farming implements that would enable them to produce more food with less physical strength.


Nafiu Busari

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