Mixed reactions trail Buhari’s directive to ban forex for food importation

.CBN no longer independent, says Moghalu. Ezekwesili: President is out-of-touch leader

.Banning forex for food importation, a step in right direction-Sani

Mixed reactions have continued to trail the President Muhammadu Buhari’s directive to the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation.

However, President Buhari in a statement by his spokesperson, Malam Garba Shehu, explained that the directive to the apex bank was to improve the nation’s agricultural production and enable her to attain full food security.

Reacting to this development, a former Deputy Governor of the CBN, Kingsley Moghalu, said the Central Bank has lost its independence.

In a series of tweets posted after the President gave the directive, Moghalu said the issue isn’t whether or not CBN should allow access to Forex for food imports.

According to him, it is about whether such an economic policy should be imposed by a political authority.

Moghalu said that an economic policy like the new directive is a major reason for the country’s poverty and instability. He also emphasised that a weak economy begets weak institutions.

The former United Nations Officer further stressed that Nigeria’s marketplace should be regulated and guided in a rational manner that creates a level playing field.

Moghalu’s tweets read: “Our economy will not be saved by Ad Hoc political decisions like this, handed down by the very institutions that should be shielded from the whim and caprice of politicians.

“Nigeria’s entire economy appears to have been sub-contracted to our Central Bank, including industrial and trade policy. In the process, the economy has fared poorly, and the Central Bank has lost its independence. This is sad!

“@NGRPresident should leave @cenbank alone to discharge its mandate independently within the ambit of the CBN Act and stop ‘directing’ it. @cbnbank should on its part assert its independence (assuming it actually believes it should be independent, but the Act says so, clearly!).”

“One of Nigeria’s Foreign Exchange Windows is the Investors’ and Exporters’ windows (I&E FX Window), where investors transact foreign currencies for investing purposes. In this market, foreign currencies are usually pegged as the CBN is equally a participant.

“By restricting FOREX for food, it means food importers will have to source for FOREX through the parallel market or other means.

“Buying from the parallel market or other sources comes at a high cost, and this may trigger the general price level and prices of food items will jack up.

“Restricting FOREX for food importation is indeed a welcome development; however, the Presidency needs to cautiously approach this, as the policy may nosedive the economy into stagflation (a condition of slow economic growth and relatively high unemployment, accompanied by rising prices),” Moghalu added.

Similarly, Oby Ezekwesili, former minister of Education, described President Buhari as a “completely out-of-touch leader” over his directive to the CBN.

Ezekwesili also lashed out on the president on Twitter, saying he is living in a bubble.

“A completely out-of-touch ‘leader’, he is cocooned away in the grandeur of @AsoRock where they serve him delicatessen and praise-sing to him: ‘ranka dede sir’, your agriculture policy is working wonderfully. All farmers in Nigeria are now billionaires & exporting to the US”, she said.

But in a contrary view, a former lawmaker, Shehu Sani says the directive given by President Buhari to the CBN is a step in the right direction.

The lawmaker, who represented Kaduna Central in the 8th Senate, made the remark via his Twitter handle on Wednesday morning.

According to Sani, this would help boost food production in the country, while also advocating that the financing of the agricultural sector be handed over to the Bank of Agriculture to go ahead to also protect farmers from kidnapping.

He tweeted: “The presidential directive to the CBN to stop issuance of Forex for food importation is the right step forward. It will boost food production at home. Next is to hand over Agric financing to the Bank of Agriculture & not CBN & protect farmers from Kidnappers”.

Sani added that the directive would help boost food production in the country, while also advocating that the financing of the agricultural sector be handed over to the Bank of Agriculture.

Meanwhile, the CBN said it will proceed with the president’s directive and that the implementation of the forex ban on food import would be in phases.

President Buhari made public the directive when he hosted All Progressives Congress (APC) governors to Eid-el-Kabir lunch at his country home in Daura, Katsina State.

According to the president, the foreign reserve will be used strictly for diversification of the economy and not for encouraging more dependence on foreign food.

“Don’t give a cent to anybody to import food into the country”, he said.

The President noted that some states like Kebbi, Ogun, Lagos, Jigawa, Ebonyi and Kano had taken advantage of the Federal Government’s policy on agriculture with huge returns in rice farming.

He, therefore, urged more states to plug into the ongoing revolution to feed the nation.

“We have achieved food security, and for physical security we are not doing badly”, he said.

Buhari said he was particularly delighted that young Nigerians, including graduates, had started exploring Agric-business and entrepreneurship, with many posting testimonies of good returns on their investments.