Nexim

Criticisms trail presidential directive on food importation

3 years ago | 49



First Bank
NNPC
The recent presidential directive on food importation has been roundly condemned as illegal and based on a false premise since there is no evidence to show that the agricultural programmes of government has resulted in self-sufficiency in food production in the country.   By Goddy Ikeh THE Nigerian agricultural sector is the worst hit by the worsening security challenges in the country. The Boko Haram insurgency has sacked millions of farmers in the North East of the country, while the herders/farmers clashes have adversely affected the farming communities in Benue State, which is the food basket of the country. And the millions of farmers displaced by the attacks from bandits and herdsmen in Benue, Nasarawa and the north-eastern states of Borno, Yobe and Adamawa are still in various displacement camps and have not been able to return home to engage in farming. With this prevailing scenario, some Nigerians have predicted imminent food security challenges in the country this year. Obviously, the spate of criticisms that greeted the recent directive of the presidency to the Central Bank of Nigeria, CBN, not to extend foreign exchange for the importation of food into the country is not unconnected with the anxiety of Nigerians over the impending high food prices. President Muhammadu Buhari had on Tuesday, August 13, ordered the CBN to stop providing foreign exchange for the importation of food into the country. Speaking when he hosted the All Progressives Congress, APC, governors to Eid-el-Kabir lunch in Daura, his hometown, Buhari explained that the directive was important considering the “steady improvement” in agricultural production and attainment of “full food security” in the country. Buhari stated that the foreign reserve would be conserved and utilised strictly for the diversification of the economy, and not for encouraging more dependence on foreign food import bills. This presidential directive attracted mixed reactions from Nigerians soon after. In his reaction, the presidential candidate of the Young Progressives Congress, YPP, in the 2019 general elections, Prof.Kingsley Moghalu, faulted Buhari’s directive to the CBN. Speaking in an interview on Wednesday, Aug. 14, Moghalu said: “The central bank does not require the formal and explicit approval of the president in order to perform its job,” Moghalu, who was a former deputy governor of the CBN said in Channels Television programme, Politics Today, that “That is another way of saying that the President himself or any political authority outside the bank should not be giving the bank direct instructions.” [caption id="attachment_167787" align="alignleft" width="276"]Kingsley Moghalu Kingsley Moghalu[/caption] Moghalu, who cited Article 1 of the CBN Act (2007), stated that the apex bank has been mandated to be independent in the discharge of its responsibilities. He, however, noted that the president can exercise his powers by approving on three key areas of the financial institution. “This is a fundamental principle of central banking around the world over the last four decades. There are only three instances in the operations of the Central Bank where the Central Bank requires the direct approval of the President. “First is the approval of the annual account of the Central Bank. The President must approve it. Second is the approval of currency designs.” “For the Central Bank to issue the coin of the realm as we say (naira notes), the President has to approve those designs and proposals. “Thirdly, any external investment by the Central Bank itself as an institution has to be approved by the President. Outside of these three specific instances, the Central Bank does not require the approval of the President in order to perform its job,” he said. Speaking in the same vein, a development economist and former deputy governor of the Central Bank of Nigeria (CBN), Dr. Obadiah Mailafia, criticized the presidential directive to the CBN on food importation, stating that the affairs of the central bank are being interfered with, rather than operating as an independent institution. Mailafia, who appeared as a guest on Nigeria’s Channels Television’s breakfast show, Sunrise Daily on Thursday said: “There has been a capture of CBN politically; it has no autonomy anymore,” “It, CBN, has no independence anymore. It is just an appendage of some people, who are using it for whatever purpose that they want. “It’s like we’ve gone back to the military days where the military will literally bring trailers to the mint and order printing of fresh mints, load them into trailers and drive off with them,” he said. Mailafia aligned himself with the position of the critics of the presidential directive, saying he was disappointed. He described the order as ‘thoughtless’, saying certain procedure must be followed before making critical decisions relating to a nation’s economy. The former deputy governor of the CBN also insisted that the country has yet to attain the level of food sufficiency that could warrant such an order. “We can never be more primitive in riding an economy. It is not only primitive, it is backward, completely backward thinking and we are not self-sufficient in food; that is very wrong,” he said. Mailafia added, “I wish there was any thinking here; there’s been no thinking whatsoever. “Its thoughtless thought; you don’t run policy on a web, you run policy based on a technical and scientific understanding of the situation at hand and then, you put together a technical paper working out the various scenarios for every alternative cause of action. The opposition Peoples Democratic Party, PDP, has also lent its voice to the criticism of the directive. [caption id="attachment_167786" align="alignright" width="279"]Kola Ologbondiyan Kola Ologbondiyan[/caption] In a statement on Thursday by its spokesman of the party, Kola Ologbondiyan, the party said that the directive was an attempt to stifle food importation in the country. According to the statement, such a directive is mean, ill-timed and completely against the wellbeing of Nigerians. “The PDP states strongly that Nigerians do not, in any way, deserve such suffering being foisted on them by such directive on food. “This directive will worsen food scarcity, exacerbate the already harsh economic situation and the general depression, frustration, resentment and despair in our country under President Buhari’s watch.” “It is indeed appalling that instead of bringing solutions to the depreciating living conditions in our nation, President Buhari is rather imposing more suffering by ordering the removal of subsidy on food even when it is manifestly clear that he had failed on all fronts to achieve any level of food security despite the huge resources available to his administration,” it added. The party said by the directive, the Presidency and the APC have demonstrated “insensitivity” towards millions of Nigerians. It added that the people were already suffering “acute hunger and starvation” due to “severe” food shortage and high prices allegedly brought by the present administration. Such a situation, according to the PDP, will breed further despondency among the citizens and heighten the security challenges in the country. It also said the directive would put more pressure on compatriots, adding that some were already resorting to suicide and slavery mission as options. “Instead of removing subsidy on food and putting more suffering on Nigerians, the PDP urges President Buhari to cut the billions of naira being wasted on luxuries in his Presidency and free the funds for the welfare of the masses. The PDP insisted that it was a disservice to Nigerians for the government to place restrictive directives on food for the masses. It, therefore, asked the President to rescind his directive “before it inflicts more damage on the polity”. In their reactions, the Nigeria Employers’ Consultative Association, NECA, and the Centre for Social Justice, CSJ, said that the directive by Buhari to the CBN was coming at a wrong time. The NECA said in a statement that though the initiative was laudable, the country could not afford such policy now as it had yet to attain self-sufficiency in food production. [caption id="attachment_167788" align="alignleft" width="259"]Timothy Olawale Timothy Olawale[/caption] The Director-General, NECA, Timothy Olawale, said that a wholesale immediate withdrawal of forex for food importation without giving a buffer period for businesses to adjust might have serious consequences on the economy. “We commend the President and indeed Federal Government for its numerous efforts at ensuring food sufficiency in Nigeria and protecting local farmers. “We note most especially the Agricultural Promotion Policy championed by the Federal Government through the Federal Ministry of Agriculture and Rural Development since 2016. “Though the recent thrust towards withdrawal of forex for imported foods is laudable and welcome, the timing, however, calls for concern,” he said. Olawale noted that the argument of conserving foreign exchange through the withdrawal or ban of forex for food importation was not tenable. He advised that rather than a blanket withdrawal of forex on food and milk importation, a gradual withdrawal with a buffer period of not less than five years should be given. The Lead director of the CSJ, Eze Onyekpere, said that the presidential directive was illegal and was based on a false premise, as there was no evidence to show that the Federal Government’s agricultural programmes had led to self-sufficiency in food production in the country. Reacting to the directive the Director General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, called for a clarification on the food items to be restricted from foreign exchange allocation. “First, there is a need to get more details and clarifications on what exactly constitutes food items in the context of the presidential directive. The harmonised system codes of the items affected need to be indicated. “It is hoped that these details would be made available in subsequent releases by the CBN.  This is essential for proper analysis of the possible impact on investment, welfare of citizens and the economy. “We need to worry about the implications of policy pronouncements for investors’ confidence and the general sentiments of investors. “Unemployment level in the country has reached a disturbing level of over 23 percent, and rising. Youth unemployment is even much more.  Yet the panacea for dealing with the scourge of unemployment and poverty is investment.” He warned that if policy and regulatory risks continued to escalate as currently being experienced, the chances of stimulating investment, whether domestic or foreign, would remain dim. Aside from a few dissenting voices from the party loyalties, it is obvious that the presidential directive will inflict more damage on the economy and the wellbeing of Nigerians. – Aug. 18, 2019 @ 14:42 GMT |
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