Economy Politics

Outright ban of food importation will lead to inflation – Society

Outright ban of food importation will lead to inflation – Society
Written by Maritime First
…As Experts urge CBN to exercise restraint in implementation***

The Soil Science Society of Nigeria (SSSN) says Federal Government outright banning of food importation will lead to inflation and further impoverish the masses.

Prof. Bashir Raji, the President of the society said this while reacting to the recent pronouncement of President Muhammadu Buhari, that Central Bank of Nigeria (CBN) should not to give “a cent’’ to importation of food.

In a telephone interview with the News Agency of Nigeria (NAN), he described the move as “a right policy, right timing but wrong approach’’.

NAN recalls that Buhari had on Tuesday in Daura, Katsina State, directed the CBN to stop providing foreign exchange for importation of food into the country with the steady improvement in agricultural production and attainment of full food security.

He said the foreign reserve would be conserved and utilised strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills.

Buhari noted that the country had achieved food security, and for physical security “we are not doing badly’’.

Raji, who emphasised that the policy would be good if properly articulated, however, advised that the president should put into consideration the nation’s food production as well as consumption.

The don specifically noted that the country required about eight million tonnes of rice annually, adding that “currently the country is producing just about 3.7million tonnes’’.

Raji decried that the country was not meeting up to 50 per cent of its needs.

“With the outright ban there is no way the country can meet up with the required 50 per cent in one year,’’ he said.

He suggested that the Federal Government embark on the ban gradually over the next five years putting in place incentives and measurable targets to ensure that the 50 per cent shortfall was met during the period.

“But now the way was going, definitely there will be a lot of inflation, there will be high prices and considering the economy at the moment a lot of people will suffer.

“The president must have been fed the impression that because of the drop in the importation of rice through our ports, the rice we consumed in this country is produce locally which is not true.

“There is a lot of increase in the production of rice locally but there has been increasing smuggling from neighbouring countries which eventually ends up in Nigeria to complement what is produce locally.

“The policy if properly articulated will be beneficial on the long run but is quite clear that we still rely a lot on importation of food and outright banning is likely to bring about inflation.

“It will also bring about pressure on the black or parallel foreign exchange market and high cost of food, especially rice.

“We don’t import yam, we don’t import cassava, beans and we don’t actually import most of our staple food; the ones we import are basically rice maybe wheat, milk, sugar and some of the exotic foods.

“Unless we can produce one and a half times what we required, it will not be a good decision to ban outright importation of food, especially now that a lot of people are suffering economically,” Raji said.

The SSSN president decried that a lot of populace were currently not eating local rice as it ought to be due to series of complaints.

He however advised the Federal Government to give incentives in terms of free seeds of the varieties to enable  people to eat locally produced rice.

Raji urged the government to consider issues regarding production and processing by buying some of these medium scale processing mills and giving them to cooperative farmers at 50 per cent discount.

“Government should give incentives in terms of input and processing so that the rice can meet the standard required by the people.

“Such incentives will go a long way in assisting the country to meet the required target of rice production and consumption in the next five years before banning importation,” he said.

Raji pledged the readiness of the society to work with the Federal Government to ensure that land degradation and climate change mitigation safeguards were put in place following the envisaged massive farming activities the policy might generate.

Also read:  NECA: FOREX ban on food importation will increase smuggling

In a related development, an Agric Economist, Mr Nnamdi Infenkwe, has also urged the apex bank not to be in a haste to increase the list of food items banned from accessing foreign exchange in the country.

Infenkwe, Senior Manager at Nisi Agro Alide Services stated this in Lagos on Thursday, noting that an immediate increase in the list would lead to rise in prices of food stuffs because importers were not ready for it.

Infenkwe who was reacting to a statement credited to President Muhammadu Buhari asking the Central Bank not to sell forex to persons in the business of importing food into the country, posited that the presidential directive was commendable, but the policy, if immediately implemented, would bring more hardship to the ordinary Nigerians.

He said that the CBN, as an independent body, knew what to do.

According to him, the CBN needs to study the situation and allow more time for importers to transit adequately.

“A rush in the implementation will lead to artificial scarcity and exorbitant prices of food stuffs in the market.

“There is no doubt the restriction will conserve the country’s foreign reserves but before the implementation, there should be more home participation in agriculture.

“The government should continue to improve on the business environment so as to lure more agric companies into our shores such that over the years the country will be sufficient in food production,” he said.

Speaking in the same vein, the Senior Special Adviser on Publicity and Strategy to the National President of Commodities Brokers Association of Nigeria (CBAN), Mr  Is’haq Yahaya however, described the proposed ban as a “mistake’’.

Yahaya said although the idea behind the ban was good, it would cause hardship for the people.

“It will cause what we call imported inflation; it will bring hardship to the masses before things could get better.

“Some economists may say it will force Nigerians to start producing internally and make the nation look inward; the truth is that there is need to review the outcome of this action.

“I think it is a mistake for such policy to take effect immediately; it should have been like a step by step thing.

“It is a good thing to make people produce internally but it has to do with individual or societal discipline with regard to economic.

“As far as I am concerned it is not a good one to have it too quickly even if it is a strategy to turn around the economy,’’ he said.

On his part, the National President of Potato Farmers Association of Nigeria (POFAN), Mr Daniel Okafor commended the president for the directive, urging farmers to key into the opportunity.

“Our GDP will grow and a lot of job will be created, our economy will grow and farmers will make money through opportunities that will be created from the ban.’’

Okafor, however, expressed worry that late release of agriculture budget might affect the success of the ban.

He also noted that climate change, lack of inputs and insecurity, arising from herders/farmers crises could threaten the directive.

 

 

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