Manufacturers React To Forex Restriction On Food Import
President Buhari discusses with Central Bank of Nigeria Governor Godwin Emefiele during the 4th Presidential Task Force meeting of ECOWAS on common currency for member states (file photo: State House)

The Manufacturers Association of Nigeria (MAN) on Friday called for clarity with regard to President Muhammadu Buhari’s directive on restriction of foreign exchange for food import.

Concise News reports that the Nigerian leader had on Tuesday directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for importation of food into Africa’s most populous economy.

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Buhari had said that the foreign reserve would be used strictly for diversification of the economy and not for encouraging more dependence on foreign food.

The Nigerian leader gave the directive when he hosted governors on the platform of the ruling All Progressives Congress (APC) to Eid-el-Kabir lunch in Daura, Katsina state.

But in his reaction, Segun Ajayi-Kadir, Director-General of MAN, said in Lagos that though the directive was commendable, clarity would be required.

“Especially in the light of our vulnerability occasioned by trade agreements that require the country to be more open to imports and the well-known antics of our neighboring countries,” Ajayi-Kadir said in a statement.

According to him, the directive is broad and needs to be specific and targeted.

“We need to know what type of food; finished and ready to eat or as input for further processing,” he said.

“In the case of the latter (in particular) we need to know the local capacity available compared to national demand and if not adequate, creditably determine what time and resources are needed to ramp up capacity and production.

“It is pertinent to pre-determine these suggestions as part of the implementation strategy.

“To achieve sustainable self-sufficiency, local producers ought to be incentivised otherwise we may be inviting a looming barrage of smuggling activities.”

He warned that the policy might be counterproductive if implemented by fiat, without ensuring necessary alignment with the fiscal and other economic policy initiatives of the present administration.

According to him, the Central Bank of Nigeria (CBN) would need to conduct an assessment of the country’s position in practical terms and realistically weigh its options before embarking on such a far-reaching policy.

“There should also be a process to be followed before such a plan is unfolded. On an issue as critical as this, a unilateral decision could be counterproductive when the operators are not duly consulted,” her said.

“We must also consider the state of our infrastructure and its capacity to respond and support the policy.”