BAN OF FOREX ON IMPORTATION OF ALL FOOD ITEMS IN NIGERIA

Onitsha Chamber of Commerce, Industry, Mines and Agriculture has perused the latest Federal Government directive to the Central Bank of Nigeria, to stop further granting of Foreign Exchange (Forex) to importers for the importation of ALL food items announced on Tuesday, 13. August, 2019 and hereby state as follows:

We wholly align with the current government’s pursuit towards achieving self sufficiency on food security in the country but issuance of certain policies especially on such sectors as food sector, considering its importance to human existence and the country’s current production should well thought out.

We note that 3556 of business ventures in Nigeria are into Food and Food value chain. It is estimated that about 541,009 food related businesses, accounting for over 3.5 million jobs will be negatively affected by this polity if implement.. What is more, about 51.5bn worth of ongoing food related transactions that are already at risk due to the polity with consequence of looses and possible shootdown. Thus, any polity that will impact this sector must be measured and implemented methodologically.

The reason for this is that the current policy is capable of causing the following;

1. This directive is interference on the independence of the CBN as contained in the CBN ACT, 2007, as amended. 2. It will lead to spontaneous high cost of food items with consequence on inflation rate. 3. It will lead to increase on smuggling of food items due to porous borders in the country. 4. There will be Proliferation of poor quality food items especially those that the country lacks adequate production capacity on at the moment.

In view of the above, ONICCIMA hereby recommend as follows;

1. We all on CBN to come up with a clarifying circular on HS Code of the foods affected by this policy in other to remove the inherent ambiguity.
2. The government should conduct a phased implementation of the policy across the food value chain.
3. Government should specify the time line for the policy considering that various food related import transactions that are currently in progress.
4. Government should ensure availability of adequate infrastructure to enable local investors gain grounds before such policies take effect.
5. There should be wider consultations with relevant stakeholders before such directives should be in place.