President of Nigeria calls on CBN to stop issuing foreign exchange for food imports

Just a few days ago, the President of the Federal Republic of Nigeria called on the Central Bank of the country to stop issuing foreign exchange for food and fertilizer imports. The statement regarding the issue was made by the spokesperson of the president of the country, and it is not the first time that Muhammadu Buhari, the president of Nigeria, made similar orders.

Just last year, Buhari made an announcement of the same sort, but the bank only partly followed his orders. As of today, even after the order of last year, some food importers still receive foreign exchange.

However, the new directive will make sure to completely ban such a thing in the country. As a result of this, no imported food or fertilizers will be provided foreign currency.

Buhari has always been very vocal about this matter. Since his election back in 2015, he worked very hard to cut imports, especially when it comes to agricultural products. The main purpose of this step is to expand the farm sector of the country and make it more successful.

How does Forex trading work in Nigeria?

In recent years, especially the new generation of the country got very involved in the world of Forex. In the country, it is the central bank that is the biggest player in the Forex exchange business of Nigeria. It regulates and controls the whole market and sets out rules on how to take part in it.

To make it more popular among the younger generation of the country, there are many Forex brokers who offer Nigerian investors special promotions, such as bonuses. To make it a lot easier for locals to start trading, a very famous FX broker called XM offers Nigerian Forex traders the XM no deposit free bonus, which allows Nigerian citizens to start investing in the Forex market without having to make deposits with their own money.

There are many people who use this type of bonuses because it makes a lot easier for them to become part of this very diverse and interesting market. Many people in Nigeria use this opportunity to learn more about trading and start investing without having to risk their own funds.

What are the outcomes of the bans?

Although the President and the leadership of the country are adopting these regulations to make sure that the local currency stabilizes, the situation is getting very hard. The buns on imports on products like rice, for example, have resulted in a huge increase of prices, which ended up creating a very frustrating situation in the country.

Despite the double-digit inflation that the country faces, Nigeria’s foreign services have been bettered as the central bank started to spend billions of dollars on programs such as propping up the local currency of the country, Naira.

The meeting was also attended by the governor of the Central Bank of Naira, however, there was no reaction for neither the public nor from him on the comments made by the President Buhari.

How much is the country spending on imports?

Nigeria’s National Bureau of Statistics, NBS, has published data showing the amount of money the country has been spending on importing food and drinks. According to the data, it has increased a lot between 2015 and 2017, after which it came down in 2018. In 2015, Nigeria spent as much as $2.9 billion, which rose to as much as $4.1 billion, according to NBS.

Although the country produces basic food commodities like sugar, flour, oil, pork, beef, milk, and others like it, the farmers in the country are not able to satisfy the demand that the country has. There are more than 200 million people living in Nigeria, which is creating a huge need for imports. However, because of the foreign exchange ban, the farmers in the country will now have to increase the production level a lot.

Why does the country need imports so much?

Nigeria is one of those countries that heavily relied on the oil industry to provide foreign exchange and the revenue for the government.

However, because of the lack of investment, the productivity value has decreased a lot. In the country, not all the available agricultural land is being used, which is creating shortages.

The country had to adjust to the new needs, however. Because of the big drop of the price of oil in recent years, Nigeria has increased the interest in agriculture a lot. But, there is a lot that needs to be done to make sure that the country is able to produce enough food for a huge number of 200 million people living here.

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