Nigeria Employers’ Consultative Association (NECA) has suggested a five-year buffer period and gradual withdraw of foreign exchange (Forex) from food importation as against what it termed blanket ‘knee-jack’ approach being pursued by the Federal Government.
Timothy Olawale, the Director General of NECA, who reacted to the recent directive by President Muhammadu Buhari to the Central Bank of Nigeria (CBN) to withdraw forex on importation of food items, warned of the implications of implementing the directive.
According to Olawale, Nigeria currently lacks the capacity to meet its food production, saying the demand that would be created as a result of this directive would be met by smuggling especially given the fact that the country recently signed on to the African Continental Free Trade Agreement (AfCFTA) intended to open up its borders.
The DG said although the directive may be well intended, it however, leaves much to be desired in the absence of a buffer period to enable businesses adjust.
“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, said Olawale.”
He further contended that the timing for policy calls for concern noting that 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.
The DG also noted that the argument of conserving foreign exchange through the withdrawal or ban of Forex for food importation was not tenable. According to him, if Nigeria is 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,” said the NECA DG.
JOSHUA BASSEY
