Food Importation: NECA kicks against the timing of FOREX withdrawal
Employers association, Nigeria Employers’ Consultative Association (NECA) has faulted the directive given the Central Bank of Nigeria by President Buhari to withdraw the Foreign Exchange (FOREX) for importation of food into the country. The body said though the decision is a laudable initiative but the timing is wrong.
According to statement released in Lagos, the association said the timing leaves much to be desired.
Speaking in Lagos, the Director-General of NECA, Mr. Timothy Olawale stated that “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 demands 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 a knee-jack withdrawal of FOREX for food importation, the NECA boss averred that “a wholesale immediate withdrawal of FOREX without giving a buffer period for businesses to adjust and source for alternatives will only breathe life to the unresolved monstrous smuggling activities, with serious consequences for the economy”. He noted that “with the recently signed AfCFTA, Nigeria will further create a thriving market for other countries and remains a dumping ground for imported goods”.
Further reacting, the Director-General noted that, “the argument of conserving foreign exchange through the withdrawal or ban of FOREX for food importation is 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, withdraw FOREX for payment of tuition in foreign universities to enable the resuscitation of the perpetually under-funded Nigerian Universities amongst 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”
Proffering a way out for Government, Mr. Olawale urged that “rather than a blanket knee-jack withdrawal of FOREX on food importation and indeed milk importation as announced by the Government, a gradual withdrawal with a buffer period of not less than five years should be given. This will ensure the proper and strategic implementation of Government’s ‘Agricultural Promotion Policy’ that was established less than five years ago. It will 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 confrontation between farmers and herdsmen.
Concluding his remarks, the Director-General noted that “it is no voodo-economics that immediate withdrawal or ban of FOREX on importation of food items will decapitate those businesses leading to loss of jobs and relocation of such businesses to neighbouring countries where they can, without hindrance, bring the products to Nigeria under the cover of the AfCFTA”.
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