FOLLOWING public outrage, the Presidency, on Monday, August 19, made clarifications to President Muhammadu Buhari’s directive that the Central Bank of Nigeria (CBN) should henceforth not “give a kobo to anybody to import food into the country” because Nigeria had, in his view, “achieved food security.” The spontaneous anger engendered by the directive was primarily owing to the claim that the country had already achieved food security, against the actual realities across the land.
It is obvious that the clarification did little to douse the provocation and tension triggered by the order which the president said would enable the country to utilise the foreign exchange accruing from the policy to facilitate the diversification of the economy. Without equivocation, the directive is a reflection of the lack of serious thinking in government business that should ordinarily produce well-thought-out policies. Granted that the policy enunciated by the president seems to have inherent benefits, including the creation of ample opportunities for the country to bolster its economy, it does not take into account the general distortions at the micro and macro-economic levels in the country. Industrial crops and consumer food items are demonstrably inadequate in achieving social and economic equilibrium. It is through their importation that the country is able to achieve a delicate balance and stability in the overall system. So, contrary to the government’s claims, the directive is nothing short of import restriction.
That cavalier pronouncement is bound to backfire as the unscrupulous businessmen who have always conspired with bad eggs among the security agencies manning the country’s borders could capitalise on it to further fleece the country. Statistics from the Central Bank of Nigeria (CBN) indicates that the import bill of the country on food items stands at a whopping N2.6 trillion on food annually. The amount represents 29 per cent of the N8.92 trillion 2019 federal budget. The huge food import bill covers such items as wheat, rice, palm oil, rice, fish, milk, tomatoes, poultry and cereals. Thus, the protectionist order cannot suffice in the face of lack of self-sufficiency in industrial crops and items for domestic consumption.
The order equally poses a threat to investments by both local and foreign interests, especially in the organised private sector which still depends on importation to augment the marginal percentage of raw materials for factories to function. While, on the surface of it, the presidential directive appears to be patriotic, the president’s premise that Nigeria has sufficient food is illusionary and illogical. If the CBN’s records affirm that about 29 per cent of the country’s budget for the current year is equivalent to what the country expends on such importation, it means that the claim of self-sufficiency is a hoax. Or, where do such imports end up? Are the imported rice, wheat, palm oil, fish, cereals, etc, being thrown into the lagoon? According to the CBN Governor, Mr. Godwin Emefiele, $1.9 billion is spent on wheat imports alone!
Then there is a technical issue: the president’s pronouncement is something that should come through fiscal policy. Every week, the CBN stabilises the naira with about $210 million in the parallel market. So, why should the CBN subsidise the autonomous market in order to defend the naira and not give out foreign exchange for agricultural imports? By asking importers of food items to source their own foreign exchange from the parallel market, the government is unambiguously telling them to go to the black market with the inbuilt high exchange rate. This will escalate the cost of production and goods, with consumers made to bear the brunt through a prohibitive price regime.
The directive to the CBN on food imports leaves much to be desired. We urge the president to be more circumspect in making statements with far-reaching implications for the economy, the well-being of the citizenry and, ultimately, social harmony.