How Forex restriction on food imports boosts foreign reserves

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Financial experts have backed the Federal Government’s move to stop foreign exchange on food importation, saying it would boost the nation’s foreign reserve and local production of food items.

Speaking in Lagos, the experts opined that the policy if properly implemented would curb importation as well as protect value of the Naira.

Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said that one of the ways to protect the value of the naira was to curb importation.

“This is a difficult time for the external sector of our economy and government must act to protect serious downward slide in the value of the naira.

“Oil price is going down again and the foreign reserve has started declining due to Central Bank of NIgeria (CBN) intervention in the forex market.

“One of the ways to protect the value of the naira is to curb importation. So the President was right in taking that decision,’’ Tella said.

He said that the policy would encourage and assure farmers that “if they increase their outputs, they can always find customers, which are good for the economy.

“Nigeria should have no business importing food in the 21st century if we had modernised agriculture in the last one or two decades, but we still see farmers carry cutlass and hoes to farm to produce food.

“Farmers in all areas, crops, animal husbandry, livestock, and even agro-allied industries should take advantage of this policy to unleash their potential and modernise their operations,’’ Tella said.

Sola Oni, a chartered stockbroker and Chief Executive Officer, Sofunix Investment and Communications said that philosophy of stopping food importation was to revolutionise agriculture, Nigeria’s hitherto economic life wire.

“The economics of the policy is to create employment opportunities locally and earn foreign exchange through exportation of such food items in the final analysis.

“The big elephant in the house is the usual issue of implementation. Nigeria has never lacked good policies but the strength of character to ensure implementation.

“It is hoped that policy will not be circumvented by rent seeking Nigerians who always have their way through top-level political network,’’ Oni said.

Oni said government should be sure that Nigeria has achieved food security.

“The policy can be done in phases to ease possible tension. It could be done in
three to five years before full implementation,’’ Oni said.