CBN Bans Importation of Maize, Fear Over Rising Costs Of Food Items

By Fola James

The Central Bank of Nigeria, CBN has added maize to the list of banned food items in the country, raising fears of worsening costs of basic food items in the country.

Sporadic complaints over rising costs of staple food have mounted among average Nigerian in the last few weeks, and analysts insist that the CBN could worsen the situation of many households over its decision to include maize to the number of already banned food items.

According to a circular no TED/FEM/FPC/GEN/01/004, released on Monday the apex bank said it would no longer make foreign exchange available to importers of maize/ corn.

“As part of efforts by the Central Bank of Nigeria to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods, and increase jobs which were lost as a result of the ongoing COVID-19 pandemic, Authorised Dealers are hereby directed to discontinue the processing of Forms M for the importation of Maize/Corn with immediate effect,” CBN said in the memo.

In 2019 alone, the country spent a whopping $1.3 billion on cereals alone, checks by the magazine have revealed.

Recall that in 2015 the government bank banned 41 items from being imported into the country.

Since then, more items have been added to the list of prohibited item which many believed was done to reduce pressure on the sliding value of the national currency, naira.

The new directive came on the crest of devaluation of naira to N380 to the dollar by the CBN, the second in less than three months, after the currency was devalued by five per cent in April this year.

The Godwin Emefiele’s led CBN said the prohibition will promote the local production of maize and stimulate economic growth in the country, but analysts insist that the decision is more of stabilizing the naira which has been badly hit as a result loss in foreign exchange earnings due to sliding crude oil prices in the international market.

According to the notice addressed to authorised dealers and signed by Dr O.S Nnaji, CBN’s Director in charge of Trade and Exchange Department, the apex bank cited four reasons why it arrived at the decision.

They are, to increase local production of corn/maize; stimulate a rapid economic recovery; safeguard rural livelihoods and increase jobs.

As part of the implementation process, the CBN directed all the authorised dealers to return all the Forms M they have already registered for the purpose of importing maize. They are to return the forms on or by the end of work tomorrow, July 15, 2020, the memo said.

The CBN said“Accordingly, all Authorised Dealers are hereby requested to submit the list of Forms M already registered for the importation of Maize/Corn using the attached format on or before the close of business on Wednesday July 15, 2020. Please ensure strict compliance.”

Meanwhile, analysts told the magazine that this is one of the extreme measures taken by the CBN to defend the naira.

The implications of this method, according to economic analysts is that the price of corn, a major staple for many Nigerians will shot up, thereby making unaffordable for many poor households.

“The prices of essential food items are already blown beyond the roof top. Rice, beans and other cereals have become too costly due to many factors, including problems being faced by farmers from bandits, boko haram and killer herdsmen, which have drastically reduced farming last season.

Apart from this, flooding due to excessive rainfall across the country’s farming belts have reduced the production of farm produce. When we add the economic shutdown, due to the corona virus pandemic to these, you will understand that the problems of food shortages loom large,” Feyisola Adams, an economic analyst told the magazine.

She explained that rather than stop the importation of basic food items “what the government needs to do now is to embark on massive food importation of essential food products and open the borders shut last year. This measure will not only force the prices of foodstuffs down, it will assure many Nigerians that the government is helping them to cope with the devastating effects of COVid 19,” she stated.

However, other analysts informed the magazine that the tough measure is necessary to save the naira from collapsing as well as protect the economy.