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Nigeria spent N1.18tn on food imports, banned items in 17 months

By BusinessNews Staff on July 27, 2015

Nigeria spent a total of N1.18 trillion (about $7.4 billion) on the importation of toothpicks, fish, milk, textiles, rice and furniture between 2014 and May 2015, it was gathered.
According to figures obtained from the Central Bank of Nigeria (CBN), fish imports gulped $1.39 billion while milk and rice imports accounted for $1.33 billion and $51 million respectively.
These commodities are among 40 items which were recently included on the list of items banned from accessing foreign exchange at the Nigerian Exchange Window by the CBN partly because of the undue pressure they exert on the local currency as well as the economic implication of such imports on the local industries.
CBN Governor, Mr. Godwin Emefiele, had contended that restricting selected item from accessing forex had become inevitable in order to reduce pressure on external reserves which had seen drastic decline as the apex bank has had to utilise it to defend the naira following the volatility in the oil market.
He further argued that the new forex restriction was needed to sustain the stability of the exchange market as well as facilitate the resuscitation of domestic industries and improve employment generation.
According to figures obtained from the apex regulatory body, a total sum of $998 million had already been spent on the importation of six items between January and May 2015.
A breakdown of the figures showed that fish importation accounted for $374.04 million; rice-$220.3 million; toothpick-$1.32 million; milk–$375.67 million; furniture-$20.39 million and textiles which accounted for $6.49 million within the first five months of the year. In total the sum of $2.73 billion was spent on CBN excluded items in the period in review.
Emefiele’s recent policy restrictions in the forex market however appeared to have paid off given the rise in the country’s external reserves which had increased to about $31.89 billion in July from about $29 billion.
Many experts have commended the bold policy initiative by the CBN to sanitise the forex market – a move which is said to be in tandem with conscious efforts of President Buhari to plug all leakages and also install vigilant forex demand management by CBN.
Citing the challenges occasioned by the steep fall in international oil prices, which had led to about 50 per cent drop in foreign earnings and devaluation of the naira by about 22 per cent, the CBN governor had lamented the increasing appetite of Nigerians for all things foreign, arguing that ‘the time is now ripe for that deep and honest conversation’ about what Nigerians really want for their country.
President of Dangote Group, Alhaji Aliko Dangote, had described the CBN’s latest intervention in forex control as appropriate for the Nigerian economy.
According to him: “We cannot be importing poverty and exporting jobs.” He said the policy was bound to encourage his company “to look inward and massively produce locally to create jobs for our growing young population.”
Dangote had also cited the ban by the administration of former President Olusegun Obasanjo, which created the opportunity for him to grow his cement business.
He added: “When Obasanjo introduced the policy, he was massively criticized by multinationals and the same foreign media. But today, we are self-sufficient in cement production.”
Nevertheless, there had been increasing support and solidarity from several analysts who believe that the country could only make sustained progress, create jobs, reduce unemployment and raise standards of living only if it takes determined steps towards producing most of what it needs.
In 2013, total forex spent on recently excluded items was valued at $3.37 billion. The figure increased to $6.99 billion in 2014 and $2.73 billion between January and May this year.
The figures further showed that in 2014, fish importation gulped $1.02 billion while rice imports accounted for $291 million.
Others include toothpicks – $2.71 million; Milk – $960.7 million; furniture – $63.39 million and textiles which accounted for $15.51 million.