MAN, LCCI foresee higher inflation after president halts fx for food imports
The Organised Private Sector has kicked against the directive of President Mohammadu Buhari to the Central Bank of Nigeria (CBN) to stop forex allocations for food and fertilizers imports, noting that the order could cause further rise in food prices in the country.
Both the Manufacturing Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) said the country is not yet sufficient in food production and that presidential directive is vague.
The acting Director-General of MAN, Ambrose Oruche told the PUNCH that the country was not self -sufficient in food production and still needed forex to import some food.
Oruche said with the country not self-sufficient in food production there would be more inflation if there was no forex to import food items such sugar and flour.
“You will see that the last inflation report that was released showed food inflation rate has gone up which shows there is no food sufficiency because what normally happens is if demand is more than the supply, the price of the product will go up,” he said.
“I don’t know where they got the statistics that we are food sufficient because food is not even generic, it has a lot of components.
“I don’t know whether we are sufficient in other products of foods like products like milk, I don’t know the statistics they are using, but we are not sufficient in food production.
“We still need wheat to produce flour, the cost of flour has gone up because we could not get forex to buy flour and the cost of sugar has gone up.
“We still need forex to import food and raw materials that will enable us to produce the finished goods that people can consume.”
The Director-General of the LCCI, Muda Yusuf said the presidential order was not new, but noted that the President should be more specific.
“This is not new. We have had this directive in the past, about a year ago. Besides, practically all food items are already on forex exclusion list of the CBN. Few months ago, the CBN added fertiliser to the forex exclusion list.
“The word ‘Food’ is generic. There are processed food items. There are agricultural products that are intermediate products used by manufacturers as critical raw materials. There is a need to properly define what food means in the context of the directive in order to avoid discretionary interpretation.”