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Bimbola Oyesola, [email protected]
The Nigeria Employers’ Consultative Association (NECA) has warned that the directive by President Muhammadu Buhari to the Central Bank of Nigeria (CBN) to withdraw foreign exchange for importation of food, though laudable, was ill-timed.
Director-general of NECA, Mr. Timothy Olawale, said that the timing of the directive left much to be desired.
He said, “We commend the President and indeed Federal Government for its numerous efforts at ensuring food sufficiency in Nigeria and protecting local farmers.
“We note most especially the ‘Agricultural Promotion Policy’ championed by the Federal Government through the Federal Ministry of Agriculture and Rural Development since 2016. Though the recent thrust towards withdrawal of forex for imported foods is laudable and welcome, the timing, however, calls for concern. While in the long run, with consistent support and policy stability, local food production might meet demand and also provide foreign exchange through exports, the reality, however, is that we presently lack the capacity for sufficient food production to meet local demand.”
Enumerating the implications of withdrawal of forex for food importation, the NECA boss noted that immediate withdrawal of forex without giving a buffer period for businesses to adjust and source for alternatives would further encourage smuggling, with serious consequences for the economy.
“With the recently signed AfCFTA, Nigeria will further create a thriving market for other countries and remain a dumping ground for imported goods,” he warned.
The director-general stated that the argument of conserving foreign exchange through the withdrawal or ban of forex for food importation was not tenable.
“If we are desirous of conserving foreign exchange, government will do well to stop the allocation of forex for the importation of petroleum products, ban medical tourism to aid investment in Nigerian hospitals, and withdraw forex for payment of tuition in foreign universities to enable the resuscitation of the perpetually under-funded Nigerian universities, among others.
“The reality of lack of capacity to embrace these other wholesome reforms is true of the situation with insufficient capacity presently for food production,” he said.
Proffering a way out for government, Olawale said that, rather than a blanket withdrawal of forex on food importation, including milk importation as announced by government, a gradual withdrawal with a buffer period of not less than five years should be given.
According to him, this would ensure the proper and strategic implementation of government’s Agricultural Promotion Policy established less than five years ago.
He added that it would 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 confrontations between farmers and herdsmen.
He stated further that, “It is no voodoo economics that immediate withdrawal or ban of forex on importation of food items will negatively impact on our businesses, leading to loss of jobs and relocation of such businesses to neighbouring countries where they can, and without hindrance, bring the products to Nigeria under the cover of the AfCFTA.”
