CBN Restricts Forex For Cassava Products Importation
The Central Bank of Nigeria has said it will no longer provide foreign exchange for the importation of cassava, starch, ethanol and all other derivatives into Nigeria.
The CBN Governor, Mr Godwin Emefiele, said this during a meeting with some state governors held at the headquarters of the CBN.
The meeting was attended by governors from 20 states, namely Borno, Lagos, Ekiti, Imo, Jigawa, Anambra, Adamawa, Benue, Sokoto, Katsina, Gombe, Bauchi, Zamfara, Edo, Benue, Ogun, Kebbi, Kaduna, Edo and Bauchi.
The purpose of the meeting was specifically to get the cooperation of the governors in the area of economic diversification, job creation and poverty reduction.
The CBN governor said the decision to hold the meeting was based on the directive by President Muhammadu Buhari that the bank should boost production of 10 key commodities.
They are rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock/dairy.
Specifically, he said in the past three months, the bank had made substantial progress but there was a need to interact more with state governors to sustain the momentum.
Emefiele said the ultimate objective was to make states economically viable through enhanced investments by the private sector.
This, he stated, would in turn create more economic opportunities at the sub- national level, as well as engage the teeming youths in meaningful enterprises, improve internally revenue base for states to meet the developmental expectation of its citizens.
He said the apex bank’s intervention in various sectors of the agricultural value chain had started to yield results.
He described Nigeria as the world’s largest producer of cassava tubers with 53 million metric tonnes per annum.
He lamented, however, that the yield per hectare averaging 20 tonnes was very low compared to other jurisdictions.
According to the CBN governor, the country imports cassava derivatives with over $600m each year.
He said, “The cassava initiative of the bank is to improve productivity, stabilise prices and encourage local processing to generate employment.
“To improve the cassava seed productivity, the bank is collaborating with the International Institute for Tropical Agriculture on the production and supply of cassava cultivars that can increase yield up to 40 tonnes.
“Arrangements are underway to support 51,388 farmers to produce 830,820 metric tonnes of cassava tubers for some identified processors.
“The country imports cassava derivatives of over $600m per year and we have also begun to restrict foreign exchange to those who want to import cassava, starch, ethanol and all other derivatives into Nigeria.”
In the area of rice, he said the bank had financed the construction of rice mills to support food self-sufficiency and security.
He also said the bank had released a total of N146bn to 849,480 farmers across the country in the wet and dry seasons.
He said, “Dangote Farms is constructing five mills, two in Jigawa State and one each in Kebbi, Zamfara and Sokoto.
“Other rice mills financed by the bank include the WACOT and Labana Rice Mills in Kebbi State, and Umza Rice Mill in Kano.”
For cotton, the governor said the bank had begun with the cultivation of 200,000 hectares of hybrid cotton distributed to 200,000 farmers in 26 states in the country.
For livestock, he said with Nigeria spending about $1.5bn yearly on the importation of dairy products such as milk, yogurt, cheese and other milk derivatives, the bank would scale up its support to the sector.
He said, “Over 95 per cent of milk products consumed in the country is imported, a narrative that we are determined to change.
“The dairy industry had huge potential such as the creation of millions of jobs and forex savings.
“In addition, the sector has an undeveloped meat processing infrastructure, declining tannery operations, inadequate large-scale private investments in cold storage and transportation, and insecurity arising mostly from pastoralists/farmers clashes, rustling, and other socio-economic challenges.”
Emefiele told the governors that the bank would continue to finance sectors that could help the country reduce its high import bill and conserve the much-needed foreign exchange.
He said, “The bank will maintain a keen interest in supporting the creation of an enabling environment to trigger private sector investment and curb the growing trend of medical tourism, which has depleted the nation’s foreign reserve.
“Our emphasis will focus on value chain financing in 10 priority commodities. These products have been responsible for a significant share of our country’s food import bill in the last couple of years.”
On impact of the border closure on the economy, he said this had started to yield more patronage for locally produced goods.
He said, “We commend the Federal Government for the border closure because it is yielding results.
“Before the closure, there was egg glut. People were bringing eggs from neighbouring countries into Nigeria, but with the closure, the demand for eggs has increased.”
The governors, who spoke at the meeting, said the intervention of the apex bank was commendable as it was coming at a time when the country was facing high unemployment rate.
The Governor of Kebbi State, Abubakar Bagudu, said that there was a huge financing gap in the agricultural sector, adding that it would be difficult for the apex bank to absorb.
He said the intervention of the CBN was a step in the right direction as it would provide the platform for others to invest in the sector.
The Governor of Lagos State, Babajide Sanwo-Olu, said that the apex bank should also come up with measures to match farmers with markets in order to reduce post-harvest losses.
He said one of the challenges facing the farmers was the lack of adequate storage system, adding that without an effective warehousing system, it would be difficult to add value to agricultural produce.