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Emefiele says CBN will aggressively enforce Buhari's forex ban on food imports

Emefiele says Buhari's directive is in line with the CBN's existing foreign exchange policies.
Nigeria's President Muhammadu Buhari and CBN governor, Godwin Emefiele
Nigeria's President Muhammadu Buhari and CBN governor, Godwin Emefiele

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, says the apex bank is committed to implementing its policy on restriction of foreign exchange issued for importation of food items into the country.

President Muhammadu Buhari sparked controversy last week when he disclosed that he has directed CBN to stop providing foreign exchange for importation of food.

This, he said, was due to the steady improvement in agricultural production, and attainment of full food security.

The president said the foreign reserve will be conserved and utilized strictly for diversification of the economy, and not for encouraging more dependence on foreign food import bills.

"Don't give a cent to anybody to import food into the country," he said.

The restriction on foreign exchange means businessman and businesswoman in Nigeria who depended on the banks for foreign currency to import food items into the country would have to source from alternative dealers which tends to be more expensive.

Many have criticised the policy as anti-people, noting that Nigeria's food sufficiency, as touted by Buhari, is wildly exaggerated.

Critics also said the president has no constitutional right to direct the policies of the CBN, an independent institution.

However, while speaking at the induction retreat of Buhari's ministers-designate on Monday, August 19, 2019, Emefiele said Buhari's directive is in line with the CBN's foreign exchange policies that started since 2016.

"If you recall, we started with about 41 items (food and non-food items), because we believe that those items can be produced in the country.

"As we stand today, there are about 43 items on that list and I will say substantially most of them are food items," he said.

The CBN boss said it's pointless for the nation to waste foreign exchange importing items that can be produced locally in the country and help to reduce unemployment which he said is fueling insecurity.

In 2016, the CBN issued a directive to stop some imported goods and services from the list of items valid for foreign exchange in the Nigerian foreign exchange markets.

Rice was the most prominent item on this list, but forex restriction on its importation has largely fueled illegal smuggling of the item across Nigeria's porous borders after its importation into neighbouring countries.

In the same time, the Federal Government's efforts to improve local production most notably through the granting of loans to local farmers has not been as successful as the government has insisted.

Despite the limited success of its forex policy, Emefiele said on Monday that the CBN will add more items to the list and never back down from the policy.

He said, "I will say that, to be honest, we would aggressively go more into the list of items that are being imported into the country, items that can be produced in Nigeria.

"I will like to stress that we would ensure that more of these items will get on the list of items that are going to be restricted from accessing foreign exchange in Nigerian banking industry not just from the CBN source."

Emefiele said Nigeria needs to improve wealth in its rural communities and that this is one of the reasons that'll drive the CBN to be aggressive with the policy.

Buhari reappointed Emefiele for a second term as CBN governor in May just weeks before he was sworn in for a second term himself.

The 57-year-old was first appointed by former president, Goodluck Jonathan, in 2014 and is the first CBN governor to be reappointed for a second term since Nigeria returned to a democratic system in 1999.

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