Hopes Of Nigeria Economy Bouncing Back To Life Brighten

 By Stephen Ubanna

Barely four months of taking the decision ending the age -long subsidy on Premium Motor Spirit, popular, petrol, and  unified the parallel and official exchange ates market by President Bola Ahmed Tinubu, which Christalina Georgina led International Monetary Fund , IMF,  had described  as too quick, the President and his economic Team appears to have gone back to the drawing board to make amends.

   The Nigerian President may have realised that the hasty decisions taken at the early state of the administration had thrown the country into one of its worst economic crisis over the last 10 years, as prices of goods and services had skyrocketed. 

The Lagos state born Nigerian President may have realised that the foreign exchange restrictions initiated by the former President Muhammadu Buhari’s Administration on the importation n of 43 items into the country that produces no valuable exportable products or agricultural products in return to earn forex except export of Crude oil could not have come up with such a policy that was implemented in the eight years of his administration then.

The situation may have been worse by the  Administartion’Anchor Borrowers Programme, ABP, floated by Godwin Emefiele, the then Central Bank of Nigeria, CBN, governor, on November 17, 2015,  with the backing of the Katsina state born Nigerian President.

 Emefiele may have been able to convince and confuse the former Nigerian President on the need for The ABP, which was said to have been created by the Nigeria apex bank ostensibly ‘’to create a linkage between anchor companies involved in the processing and small holder farmers, SHFs, to boost key agricultural Commodities, stabilise input supply to agro-proccessors and address the country’s negative balance of payments on food’’.

CBN, Corporate Headquarters, Abuja, FCT

  Recall that in Launching the ABP, in 2017, Emefiele, the immediate CBN governor had given the impression that ‘’it would make cash available for increased agricultural production in Nigeria’’. Between 2015 and 2023, the CBN was said to have disbursed over N1.1 trillion to the beneficiaries of the ABP, which the IMF, had said  has not succeeded  in increasing ‘’ the country’s food production,  due to the difficulty in  targeting  the correct recipients’’.

 Reports from the CBN, under the current Leadership of Michael Cardaso, who incidentally was the Commissioner for Economic Planning and Budget  underTinubu as governor of Lago state and who had served  as a one -time Head of Citibank in Nigeria, shows that  only a little  above  N546 billion  has been repaid by the debtors , leaving a whopping balance of N577 billion still in the hands of the borrowers.

  Even the IMF, which had been monitoring the management of the ABP, under Emefiele,  had said  that ‘’the repayment  has been weak’’ , noting that the loans are not always swell targeted . It noted that occasionally the funding is used for other purchases by the new agricultural input trading companies to elicit rents.

The huge amount still being held  up by the borrowers from the ABP, according to informed sources  includes Money Deposit Banks, MDB,  Microfinance banks, state governments and farmers’ Association, individuals and Corporate entities.

Given that the incumbent Nigerian President could no longer tolerate the lacklustre attitude of the beneficiaries of the ABP, to refund their debts may have informed why  had  had asked the CBN, to   collaborate  with the Law enforcement agencies  to recover  the billions of naira still outstanding since 2018. The President had given the new Leadership of the CBN, up to September 18, 2023 re recover the huge debt.

Determined to reshape the Nigerian economy with the right policies, the government had no option but to lift the foreign exchange restrictions placed on the importers of the 43 banned items some eight years ago to bring relief to the people.

The apex  bank , which had issued a Statement relating to the new policy change ,  had made clear to those that cares to listen  that henceforth ‘’all importers  of all the 43 items previously restricted  by the 2015 Circular , referenced TED/FEM/FPC/GEN/01/10 and its addendums  are now allowed ‘’ to purchase foreign exchange  at the official foreign exchange market.

Until the ban on the importation of foreign rice into the country by the Buhari’s Administration, Akinwumi Adesina, a former minister of Agriculture and Rural Development, under former President Goodluck Jonathan’s Administration and now President, African Development Bank, AfDB, had revealed that the country spends over N356 billion on yearly importation of rice .

 Isa AbdulMumin, Director of Corporate Communications, CBN, who had described the new policy as a significant  change  to the country’s foreign exchange  market policy  had said  that ‘’the action  will boost  the liquidity  in the country’s forex market as the bank would intervene from time to time but will decrease the interventions  as the liquidity improves.

Notwithstanding that the value of the naira had remained stable at about N760-N770.00 to the North American country of the United States dollar, at the official forex market, the demand pressure at the parallel market may have informed why the local currency had hit to over N1,030.00 to the US dollar.

  Indeed, with the lifting of the ban placed on  the sale of forex  to  importers of  foreign rice, Cement,   Processed Vegetable Oil,  poultry products,  galvanised steel sheets, Enamel ware,  Steel pipes,  Iron rods, Steel nails,  Kitchen utensils,  Gas Cylinders Tomatoes/Tomato pastes, Soap and Cosmetics and  Tinned fish in sauce(Geisha/sardine and  28 other items, at the official  forex market   Tinubu, may have sent a message to his predecessor, who may have expected to continue with the implementation of the ABP, that it is  dead  and would never be revisited again.  

The Buhari’s forex policy in the eight years of his Administration  may have given Hameed Ali, a retired , Army Colonel and former Comptroller General, Nigeria Customs Service, NCS, and his interventionist Units and adhoc  team including the Joint border patrol personnels to beam their searchlight on the movement of cargoes at the country land border areas  and seaports to ensure that none of the prohibited items enters into the country.

Although, Ali and his interventionist officers may have done well in the anti-smuggling operations, many   believe that there still cases bookings  as the   officers  were said to have  compromised on their jobs.  It was not surprising why foreign rice, used tyres , bales of second hand clothing  imported through the neighbouring West African country of Benin Republic  port, Cotonou, had continuously flooded the Nigerian market.

 From Lagos, Ogun, Oyo, Cross river, Sokoto, Zamfara, Katsina, Kano to, used tyres and second hand clothing  Jigawa, the story is the same: foreign rice, had flooded the local markets , thus making nonsense of the ABP, which was initially giving the country hope of becoming  net producer  and exporter of rice in the West and Central African subregions.

 Rice mills  like Abakalike, Eboyi state, Lake rice, belonging  to Lagos and Kebbi states, Anambra rice, Labana rice as well as the production of Bababan Gona’s rice, Ofada  rice  in Ogun state and  many others were coming up fast to compete with the imported foreign par boiled rice from the Asian countries of Thailand, India and Vietnamin the North merican Continent but gradually lost steam, fuelling speculations making the rounds that the country cannot feed itself.  

There are indications that the Vswani brothers, Olam, described as the traditional rice importers in Nigeria and many others, may take advantage of the government new  forex policy to return back to the business by reaching out to their suppliers in Thailand, India and Vietenam.

Already some the importers who had relocated to Benin Republic and other countries in the West African subregion to do their rice importation which are smuggled into the country through unapproved routes but had lost substantial part of their cargoes to the Nigeria Customs Interventionist units in different parts of the country were said to have indicated interest to return to the Nigerian ports to do their business.

 For importers with their agents who may want to take advantage of the government to dare the Adewale Adeniyi, acting Comptroller General of Customs and his men on the road to bring in Truckloads of  rice into the country  through the land border areas would be disappointed. This is because the government policy prohibiting the importation of rice and vehicles through the land border areas is still in force.. This is the time for the  Customs acting Comptroller General  to effectively monitor the Interventionist Units to be able to know the Units that are actually do the  Customs job as expected.  

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