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’’.
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.
