Few days after President Muhammadu Buhari ordered the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation, the Manufacturers Association of Nigeria (MAN) has called for synergy between the Central Bank of Nigeria and stakeholders in the importation sector.
This is even as the Nigeria Employers’ Consultative Association (NECA) also warned that there would be unprecedented smuggling of food products because of the directive to the CBN to withdraw foreign exchange for food importation.
It will be recalled that in a statement issued on Tuesday, Presidential spokesman, Garba Shehu said the president had asked the CBN to stop issuing foreign exchange for food importation so as to stimulate the growth of agriculture and to ensure food security.
Reacting to this, the President of MAN, Engineer Mansur Ahmed, who spoke on Thursday in a telephone interview with Shipping Position Daily however, lauded the decision even as he said that it is not something that will be implemented immediately.
Explaining further, he said that the government should understand the fact that different value chain has different conditions for achieving backward integration, adding that the intention is when people are producing some of these things locally, it will encourage backward integration.
“You must know that not all value chain has the same condition for backward integration, some require a lot more investment. For instance if you want to go into flour milling or rice, all you need to do is to grow more rice, in other areas the investment could be much and the time frame will be longer”
“I think for different items you have different investment and different time frame, so I believe that the directive is good but in implementation we must take into considerations those differences; we must also understand that there are certain things you cannot do overnight”
“So our suggestion is that the authority particularly, the Central Bank of Nigeria should sit down with the operators in the various factors and agrees on how to achieve the objectives of the policy. What is required for effective backward integration to take place, what can be done to achieve the goal of reducing the importation of food items without excessively creating other problems”.
On his part, the Director-General of NECA, Mr Timothy Olawale, told reporters in Lagos that, although the directive might be well intended, it left much to be desired in the absence of a buffer time for adjustment.
According to Olawale, Nigeria currently lacks the capacity to meet its local food demand and the demand that will be created as a result of the directive will be through smuggling.
He said that given the fact that Nigeria recently signed the African Continental Free Trade Agreement (AfCFTA) intended to open up the borders, smuggling would become the order of the day.
”With the recently signed AfCFTA, Nigeria will further create a thriving market for other countries and will remain a dumping ground for imported goods.”
He said the implication of a ‘knee-jack’ action, was that “a wholesale immediate withdrawal of FOREX without giving a buffer period for businesses to adjust and source for alternatives would boost smuggling activities.
”This will have serious consequences for the economy..
The NECA chief said that conserving foreign exchange through the withdrawal or ban of FOREX for food importation was not tenable.
Olawale said that if Nigeria was desirous of conserving foreign exchange, government would do well to stop the allocation of FOREX for the importation of petroleum products and ban medical tourism to aid investment in Nigerian hospitals.
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