Newswire : Nigeria to slash funds for essential food imports while currency crisis looms

Nigeria currency

Aug. 12, 2019 (GIN) – Hard to imagine a steaming plate of Nigerian jollof rice without the rice. Or without fish. Or wheat. Rice, fish and wheat are Nigeria’s top three food imports but foreign exchange for these staple food imports is about to end by order of President Muhammadu Buhari.

Presidential spokesman Garba Shehu said Tuesday the move to end imports of these essential foods is aimed at improving Nigeria’s agricultural production and attaining food security.

“Don’t give a cent to anybody to import food into the country,” Buhari was quoted by his spokesman Shehu to say. “The foreign reserve will be conserved and utilized strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills,” he added.

Imported milk and other dairy products will also be restricted from access to foreign exchange in an effort to boost local production and investment in ranches.

Some may have hoped these risky ideas would be forgotten in time. But a recently decided lawsuit in the UK may have prompted the government to advance the timetable.

The lawsuit, decided this month, gives a company called Process and Industrial Developments Ltd the right to pursue some $9 billion in assets from the Nigerian government over an aborted gas project.

Currently Nigeria spends US$22 billion on food imports annually. Rice, imported from Thailand and India, accounts for about US$1.65 billion which could make Nigeria the world’s second largest importer of rice after China in 2019.

Many obstacles stand in the way of Nigeria becoming self-sufficient in food, some experts say. These include climate change, weeds, pests and diseases, farmers’ limited access to credit, training, rudimentary and time consuming tools like hoes, slashers, sickles, axes and rakes.

Economic analyst Tokunbo Afikuyomi says making it harder for businesses to import food through official channels will push importers to find foreign exchange on the black market.

“Making it harder for businesses to import food through official channels is likely to lead to higher food prices as businesses use more expensive exchange rates or expensive domestic alternatives,” Afikuyomi told CNN.

He said Nigeria’s strategy should be to produce which foods it can grow cheaply and import others that are more expensive to make.

“Nigeria cannot produce all the food it eats — no country in the world is able to achieve this. Banning food imports to save foreign exchange is not the way to build a sustainable economy,” he added.

Leave a Reply