On August 13, President Muhammadu Buhari gave a directive to the Central Bank of Nigeria to stop providing foreign exchange for food importation into the country.
Simply put, foreign currencies will no longer be provided by any commercial bank to any individual or company seeking to import food into Nigeria.
“Don’t give a cent to anybody to import food into the country,” presidential spokesperson, Garba Shehu, quoted the president as saying.
“We have achieved food security, and for physical security we are not doing badly.”
However, this might put pressure on supplies and push up the prices of imported food as importers will now have to source for their forex at an extra cost.
On the positive side, this will encourage more food production. It is also a welcome development for bureau de change (BDC) operators.
The president might have given the directive based on his belief that the nation has attained food security and food self-sufficiency but experts disagree.
President Buhari had boasted that Nigeria now produces more than 90 percent of the rice it consumes despite a market survey that showed that over 70 per cent of rice in Nigeria markets are foreign or imported.
Last year, the former Minister of Agriculture and Rural Development, Audu Ogbeh, said Nigeria spends $22 billion on food importation annually.
Over the years, Nigeria has been an import-dependent nation. Items imported range from rice, milk, stock fish to even toothpicks.
The nation only recently renewed its interest in the agricultural sector which was neglected after a big drop in the price of oil which the country has relied on for foreign exchange and revenues for years.
Food items like rice, margarine, palm oil products, vegetable oil, vegetables and processed vegetable products, canned fish (sardines, mackerel, etc), poultry, tomato, tomato paste and milk joined the list of 43 items earlier excluded from sourcing forex from official outlets.
Presently, most baby foods consumed in Nigeria are imported as the few locally made baby foods available are not popular.
Also, fruits like apples and grapes – majorly imported – will be affected by the directive.
Lovers of good liquor, and wine should also brace for high prices if importers source their foreign exchange from unofficial outlets.
Other food items that could be affected if the apex bank implements the presidential directive fully include:
Beverages, including cane or beet sugar and chemically pure sucrose in solid form, fruit juice, coffee and tea.
Cereals such as cornflakes, oats, etc.