Not yet time

We can’t afford to stop forex for food imports now

EXPECTEDLY, President Muhammadu Buhari’s directive to the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation has elicited diverse reactions from many Nigerians. While some welcome it as a laudable move to attain food security, many others have picked holes in it, saying it would rather make food more expensive than cheap, in the long run. Indeed, some mischief makers have deliberately interpreted the directive to mean complete ban on food import, thus compelling the government and the CBN governor to come out to straighten the record.

President Buhari, who spoke through Malam Garba Shehu, his spokesman in a statement, gave the directive when he hosted All Progressives Congress (APC) governors at his country home in Daura, Katsina State. According to the president, the foreign reserve saved from the measure will be used strictly for diversification of the economy and not for encouraging more dependence on foreign food.

“Don’t give a cent to anybody to import food into the country,” the statement said tersely.

Without doubt, the country needs all the foreign exchange it can get; there is therefore no point wasting it on things we have the capacity to produce locally. Indeed, to underscore how dire the situation is with regard to forex, the CBN governor, Godwin Emefiele, has hinted of more items joining the long list of such items that would no longer be provided forex at the official window.

We understand the president’s concern that, by continuing to make forex available officially to food importers, particularly those food items over which we have comparative advantage, the country would only be creating jobs for people abroad while many more Nigerians would be jobless, with the attendant insecurity and other social consequences. Moreover, it would continue to have negative impact on the value of the Naira.

But the situation is not that straightforward. With hindsight, such measures that we were not prepared for in the past had turned out to be counter-productive. For instance, the increase in tax for completely built vehicles has raised the price of such cars beyond reach because we do not have the supporting infrastructure to encourage local vehicle manufacturers.  Power supply remains problematic. We cannot even get the local content required to see the policy through.

We fear a similar situation would repeat itself, especially when it is clear that the support infrastructure that would make the government’s directive on forex work is lacking. About four  years ago, the government came up with highly optimistic projections about local rice production, but we know this has not turned out the way it was envisaged. Yes, some state governments have keyed into the Federal Government’s rice production policy, the fact remains that we still have more of the imported rice than local ones in our markets, no thanks to our ever porous borders.

What is likely to happen with the new presidential directive is that those hell bent on bringing in the food items that government has denied official forex would source their foreign exchange  from other sources and bring the commodities in at exorbitant prices. Ultimately, Nigerians would have to pay more for food items, which is the very antithesis of what the government intended with the new directive.

What we have on our hands right now is not necessarily scarcity of food but lack of good roads between the farms and the towns and villages where the farm produce is consumed. We agree with President Buhari that agriculture is our strength and we should therefore take full advantage of it to better the lot of the people. But then, we need storage facilities as most of what get out of the farms perish in the course of transporting them to consumers; we need agro-allied industries to add value to the raw agricultural products, etc.

In short, the government must provide the enabling environment for agriculture to thrive before contemplating shutting out food importers from official allocation of foreign exchange.