In Nigeria, the protectionist screw-turn continues to tighten. After the recent restrictions on imports of milk and textile products, it is now the turn of other imported foodstuffs to be put on the sidelines.
In a statement issued on Tuesday, the Nigerian presidency announced that Head of State Muhammadu Buhari had asked the Central Bank of Nigeria to « stop providing foreign exchange for the import of food products into the country ». A protectionist stance that the Nigerian leader particularly tastes, who aims to make Nigeria a self-sufficient and sovereign country in terms of food: during his first mandate (2015-2019), Muhammadu Buhari had (already) banned rice imports in order to revive the local sector. With mixed success, however.
Nigeria, Africa’s largest oil producer (2.3 million barrels/day) and a demographic giant of 200 million inhabitants, has for too long neglected its non-oil sectors (90% of the country’s foreign exchange) to be able to change the current economic paradigm in such a short period of time, particularly in the agricultural sector. Over time, however, the effects of this sovereignist policy could eventually bear fruit. In the short term, however, the ban on foreign currency subsidies on food imports (more than $2 billion per year) is another financial imperative. With oil prices under pressure (-18% over 3 months) and a significantly reduced fiscal margin of manoeuvre, any means are possible to preserve the country’s foreign exchange reserves.
However, voices opposing this anti-importation measure have not failed to be heard. Former Central Bank Deputy Governor Kingsley Moghalu and former Minister of Education Oby Ezekwesili were quoted in the local media as saying that « Muhammadu Buhari violates the independence of the Central Bank ». As for the Nigerian business community, it fears that such a policy could feed the black market with neighbouring countries (Benin in particular) and lead to the exploitation of parallel channels to obtain foreign currency.