The recent pronouncement by the Federal Government through the Presidential Economic Advisory Council (PECA) that Nigeria spent about N1.85 trillion on food import in 2020, despite the closure of the land borders, has propped up debates over the country’s quest to achieve food sufficiency in agric sector. Taiwo Hassan reports
Indeed, the rise in the country’s food import bill has become worrisome for this present administration of President Muhammadu Buhari because of its fundamental burden on the country’s revenue generation, foreign exchange earnings and Gross Domestic Product (GDP). Haven’t seen the huge amount of money food importers spend on imports, thus spiking increase in the country’s food import bill, the administration came up with proactive fiscal and monetary policies to ensure that Nigerians eat what they produce. To buttress its proactive policies to achieve food sufficiency and also reduce the huge forex spending on food import, President Muhammadu Buhari decided to partially close down the borders to guard against importation of agric produce. Despite the border reopening by government, that of agric product importation is still in place for food manufacturers and importers. In addition, President Buhari also ordered the Central Bank of Nigeria (CBN) not to give forex to food importers. Similarly, the apex bank also came up with unified exchange rate, whereby importers or local manufacturers are denied Form ‘M’ for agric product importation. All these steps by the Buhari’s administration is to ensure that Nigeria attains food sufficiency and become net exporter of food globally.
In particular, the Federal Government’s move to change the paradigm of Nigeria achieving food sustainability did not come easy as the possible outcome in terms of its negative multiplier effects on agric stakeholders has been profound as many firms and importers are either out of business or even shutdown due to nonavailability of forex. Also, this hardship can be seen profoundly among poultry and fish farmers, who are severely hit with scarcity of animal feeds amid ban on importation of foreign agric products. In a chat with this newspaper, the Director of Operations, Answer Industry, an egg powder processor in Ijebu-Ode, Ogun State, Mr. Samuel Shewoniku, disclosed that egg importation was costing the country about $1 billion yearly in foreign exchange earnings. He proposed that government needed to ban or impose additional duty on importation of egg powder (dehydrated and powdered eggs) to save the country from economic waste associated with the importation. According to him, egg powder is rich in vitamins, minerals, and is used in confectioneries such as ice-creams, cakes, cookies, noodles, doughnuts; feed mills; and pharmaceutical industries. However, he affirmed that Nigeria could attain sufficiency in egg production with the right business environment, adding that importation had affected local egg production.
Food import bill reports
However, speaking at the 2021 National Economic Outlook event organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos recently, Chairman of the Economic Advisory Council, Doyin Salami, disclosed that Nigeria, Africa’s biggest economy, spent N1.85 trillion to import food for nine months during the shutdown of international land borders, a 62 per cent increase when compared to same period in 2019 when the borders were left opened. Salami maintained that this spending pattern was a signal of the nation’s lack of capacity to feed itself by relying on food import for survival. It would be recalled that President Buhari had ordered the closure of Nigeria’s land borders with neighbouring countries in August 2019 to curb the smuggling of rice, other commodities and weapons. According to Salami, “despite border closure, our national import of food amounted to N1.85 trillion between January and September 2020, a 62 percent increase when compared to the same period in 2019. “This suggests a weakness in our ability to feed ourselves and raises the need to consider a review of intervention policies in agriculture. “Agriculture continues to decelerate growing at 1.7 per cent yearto- date while consumer sensitive sectors like manufacturing and distribution continue to contract in double digits,” he said. This, according to Salami, was partly as a result of the serious climatic concerns which were undermining agricultural output. He also noted that about 2.5 million farmers were impacted by floods in 2019.
Salami, an ex-member of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC), said uncertainty around foreign exchange – convergence, marketreflective rates and transparent determination mechanism, balance of payment imbalances were large and would remain key questions in 2021. He said by the measure that drives the value of the naira based on the naira/dollar inflation differential, the currency should be trading around N439/$ at the official market. To the economic adviser, the agricultural sector, ICT, real estate and oil and gas are vulnerable to a probable major adjustment to the foreign exchange rate. Salami said official payment data showed that approximately $30 billion (almost 10 per cent of our national economy) is obtained from sources outside the CBN, adding that the gap between the official and other exchange rates was a source for concern.
NBS report on Nigeria’s food import
Nigeria’s spending on food rose significantly in 2019, according to a report by the National Bureau of Statistics (NBS). The report, released in May last year, showed that total expenditure by households on food and non-food items for 2019 was N40.21 trillion, up from N21.62 trillion recorded in 2018. The report showed that of the total household expenditures, food accounted for 56.65 per cent; 43.35 per cent accounted for expenditures on non-food items. Food consumed outside the home constituted the largest expenditure followed by transportation costs. Salami said during the period, Nigeria’s cumulative trade deficit amounts to N4.6 trillion ($12 billion).
However, some agric stakeholders are divided over Federal Government’s N1.8 trillion food import spending, calling the move to achieve food sufficiency in the country a fluke propagated to deny Nigerian populace good foreign food products.
According to some farmers, government’s campaigns geared towards sustainable food sufficiency in the country is only on paper but realities show that much still need to be done before Nigeria attains self-sufficiency in food production. National President, All Farmers Association of Nigeria (AFAN), Kabir Ibrahim, an architect, insisted that recent events in the country’s agric sector were negative signs that the quest to achieve sustainable food sufficiency in the country was now more challenging in all front. According to him, there is even need for government to declare a state of emergency in the country’s food sector over impending second wave COVID-19 and other challenges. Ibrahim, in a chat with this newspaper, admitted that the various challenges were hampering the attainment of total food sufficiency in the country. However, the AFAN president’s position on Nigeria’s food security challenges can be linked to international bodies like the United Nations World Food Programme (WFP), Children’s Fund (UNICEF) and the Food and Agriculture Organisation (FAO) that had also warned of the impending food crisis in Nigeria. “I think a state of emergency should have been declared by now. It is already getting too late. “Every available data is pointing to the fact that we are in a precarious situation already. The government needs to do something urgently to address all issues affecting food sufficiency,” Ibrahim warned. In his comment, Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, said that the commencement of AfCFTA agreement and the reopening of the land borders could impact Nigeria’s hope to attaining a seamless trade facilitation in the continent with resurgences in smuggling of agricultural products, particularly imported rice and poultry, considering the porous nature of Nigeria’s land borders. He emphasised that it was expected that smugglers would finetune their activities this year. Yusuf said there was high expectation that the commencement of AfCFTA could see Nigeria being a destination for imported food products in the absence of adequate border monitoring measures this year. Yusuf explained that the most challenging task expected to face the country’s agric sector in a bid to rallying food sustainability and boosting domestic food production and minimise food supply gap in the New Year would be AfCFTA, insecurity and borders reopening, which are expected to dominate Nigeria’s agric products in 2021 despite government’s ban.
Agric stakeholders said that rising food import bill in the country portended danger for the country’s quest to achieve sustainable food sufficiency in agriculture, thus making government’s agenda an illusion task.