NIGERIA: FINANCE EXPERTS REACT TO BUHARI’S DIRECTIVE TO HALT FOREX FOR FOOD IMPORT
Nigerians have continued to react to last Tuesday’s directive by President Muhammadu Buhari to the Central Bank of Nigeria (CBN) to halt further provision of foreign exchange for the importation of food items into the country.
According to his spokesperson, Garba Shehu, the directive became necessary after the president said his administration has achieved food security.
“Don’t give a cent to anybody to import food into the country,” the president was quoted as saying while hosting the All Progressives Congress (APC) governors to Eid-el-Kabir lunch in his country home in Daura, Katsina State.
But, various individuals and groups have either criticized the directive as draconian and unconstitutional, while others have hailed it as a step in the right direction to boost economic growth.
Others said although the policy may be a positive step, government and all interest groups should pursue it with caution to avoid a negative backlash.
The former deputy governor of the CBN, Kingsley Moghalu, said in a series of tweets via his Twitter handle, @MoghaluKingsley, the directive will result in a negative outcome to the economy.
“The implication of this draconian order is that importers will go to the parallel market to purchase dollar and in turn increase dollar value to Naira, and at the end put pressure on our reserve and Naira,” Mr Moghalu said.
The presidential candidate of the Young Progressives Party (YPP) in the 2019 presidential elections said the government should rather make the country’s agriculture competitive and import will fizzle out.
Urging the president to allow the CBN to discharge its mandate independently within the ambit of the CBN Act, and stop subjecting it to such directives, Mr Moghalu said the apex bank should assert its independence.
According to him, the entire Nigerian economy appears to have been “sub-contracted” to the CBN, including industrial and trade policies, resulting in the economy faring poorly, and the bank losing its independence.
To create a level playing field for all players, the CBN deputy governor said the country’s marketplace should be regulated and guided in a rational manner.
“Our economy will not be saved by ad hoc political decisions like this (directive on FOREX) handed down by the very institutions that should be shielded from the whim and caprices of politicians.
“The issue here isn’t whether or not CBN should allow access to FOREX for food imports. It is about whether such an economic policy of a Central Bank should be imposed by a political authority. A major reason for our poverty, instability and weak economy is weak institutions,” he said.
