Presidency: Buhari’s Order on Food Import Aimed at Diversifying Forex

Omololu Ogunmade in Abuja

The presidency at the weekend explained that last Tuesday’s disclosure by President Muhammadu Buhari that he had instructed the Central Bank of Nigeria (CBN) not to provide forex for food import was a deliberate effort to diversify forex provision from the government to the private sector.

According to the presidency, contrary to beliefs that the move was an attempt by the federal government to exclusively control foreign exchange provision, it rather sought to provide the platform for anyone who wants to import some affected items to freely do so by sourcing its forex through private institutions and simultaneously pay its customs duty on restricted products.

Specifically, the presidency was reacting to an article in the Financial Times of August 14, 2018 edition, which criticised the president’s proclamation on food import restriction, saying the medium ought to rather support government initiative instead of holding an erroneous belief that it was a ploy by the Federal Government of Nigeria to control everything.

In his article titled: “Muhammadu Buhari sparks dismay over policy shift on food imports,” the author, Neil Munshi, had among others, insinuated that the forex restriction on agricultural products was antithetical to the spirit and letters of the Africa Continental Free Trade Agreement (AfCFTA) recently signed by the president in Niger Republic.

But Senior Special Assistant to the President on Media and Publicity, Malam Garba Shehu, in a statement, described the submission of Munshi in the article as incorrect.

Munshi’s article was a reaction to Buhari’s disclosure on August 13, in Daura, Katsina State, that he had instructed the Central Bank of Nigeria (CBN) not to “give a cent to anybody to import food into the country.”

The president had added that, “foreign reserve will be conserved and utilised strictly for diversification of economy and not for encouraging more dependence on foreign import bills.”

However, the president’s comment generated wild criticisms from both citizens and the international media, describing the policy as thoughtless and counter-productive.

But the presidency, while denying Munshi’s argument that the government of Buhari was restricting the importation of agricultural products into the country, said no ban or restriction was placed on food import by the government.

Instead, he said what the government of Buhari had consistently done was to work towards enhancing the country’s industrial and agricultural base by stimulating the growth of industry in the country through the CBN and suspending the provision of forex for import of some 41 items.

However, he added that anyone who wanted to import such items was free to do so provided he would source for forex through private institutions and simultaneously pay the customs duty on such restricted products.

The statement read: “Your article “Muhammadu Buhari sparks dismay over policy shift on food imports” (15 August) suggests the Nigerian Government is restricting the import of agricultural products into the country. This is simply incorrect. To be absolutely clear, there is no ban – or restriction – on the importation of food items whatsoever.

“President Buhari has consistently worked towards strengthening Nigeria’s own industrial and agricultural base. A recent decision sees the Central Bank maintain its reserves to put to use helping growth of domestic industry in 41 product sectors rather than provide FOREX for the import of those products from overseas.

“Should importers of these items wish to source their FOREX from non-government financial institutions (and pay customs duty on those imports – increasing tax-take, something the FT has berated Nigeria for not achieving on many occasions) they are freely able to do so.

“Diversification of FOREX provision towards the private sector and away from top-heavy government control, a diversification of Nigeria’s industrial base, and an increase in tax receipts – are all policies one might expect the Financial Times to support. Yet for reasons not quite clear, the author and this newspaper seem to believe the president’s administration seeks to control everything – and yet do so via policies that relinquish government control.

“We look forward to the next instalment of Mr. Munshi’s bizarre and puzzling article series.”