Nigerian President Muhammadu Buhari has ordered the central bank to stop providing foreign exchange for food and fertilizer imports as part of ongoing efforts to boost local farming production and conserve scarce dollars.
“Nobody importing food should be given money,” Buhari said Thursday in Abuja, the capital. Food importers should source their foreign exchange independent of the central bank, he said.
Nigeria is struggling to close a trade gap which widened to a record 1.8 trillion naira ($4.7 billion) in the three months through June. This is after the global crash in the price of oil, the country’s main export, dropped 47% in the wake of the coronavirus pandemic which sapped demand for demand for the commodity.
Nigeria is struggling to close a trade gap which widened to a record 1.8 trillion naira ($4.7 billion) in the three months through June. This is after the global crash in the price of oil, the country’s main export, dropped 47% in the wake of the coronavirus pandemic which sapped demand for demand for the commodity.
Inflows of the greenback into Africa’s largest economy dried up due to the oil-price plunge, increasing pressure on dollar reserves and forcing the central to devalue the naira twice this year already.
The ban on dollar access for these imports could further fuel food inflation that’s already at a two-year high of 15.5% as border closures with Nigeria’s neighbors that started in August 2019 and frequent clashes between herders and farmers weigh on supply. On top that, floods have washed away at least 450,000 hectares (1.2 million acres) of rice farmland in the northern state of Kebbi, where most where most of the locally produced white grain come from. That destroyed more than 25% of the harvest.
The West African nation spent 649 billion naira, or 16% of its total import bill, on food and live animals in the three months though June, according to the statistics agency. Buhari on Sept. 2 said “corrupt’ foreigners were deliberately creating food scarcity so they can profit from high prices.
– Bloomberg