NEW TELEGRAPH
Following the drastic depreciation of naira against international currencies, including the CFA, some foreign food merchants, acting as middlemen, are reported to have invaded Nigeria from neighbouring countries to buyout farm produce directly from farmers and major markets.
To this end, Nigeria’s farmer group, the All Farmers Association of Nigeria (AFAN), has raised the alarm over the development.
The association, which said it was backing the ongoing monetary policy reforms by the Central Bank of Nigeria (CBN)’s management to shape the country’s agric sector and economic landscape, however, disclosed that the 80 per cent naira devaluation had provided opportunity for middlemen from neighbouring countries to invade Nigerian markets and farms to clear what should be consumed locally.
The National Chairman of AFAN, Arc. Kabir Ibrahim, in an interview with New Telegraph, said food scarcity and rising cost of foods would continue because most of the food meant for Nigerian markets and citizens were being diverted and moving out en-mass through the borders.
According to him, it is unfortunate that Nigeria is surrounded by over 100 million Francophone citizens, who have been taking advantage of the country’s naira devaluation to stock – pile foodstuff and eventually moving it outside Nigeria.
Kabir said: “I tell you something, food inflation sub-index is less than being compared to our monetary policy interventions. And I will tell you why?
Because, the only thing that the apex bank can do is to regulate the arbitrage on forex to reduce the dollar renting, but it does not deal with the cross border demands.
“I want to tell you that about 100 million Francophone countries’ citizens surround us here and they are buying our foods because there is an artificial drop in value of naira in favour of the CFAs currently.
“About 10 years ago, the naira was buying 10 CFAs. But now, it’s 0.7 per cent CFAs to naira, which means in relating to them, our money is like 80 per cent devalued.
And it is not because their economy is strong, it’s not strong at all.” The AFAN chairman added: “For instance, France monetised their CFA to dollar and they make sure that they protect 80 per cent of their reserves to keep that value intact.
So they are just taking our foods not because of the reason we are talking about or arguing on our poor economy, but because it is very cheap to buy Nigerian produce and get away with it via the shared borders.
“And they are buying the Nigerian naira with dollar. And ECOWAS refuses to do anything in that line. ECOWAS refuses to allow free exchange of food and services and right of establishment, unless you move to value addition at the frontiers stage, you won’t be able to realise the value of those commodities until you then bring it in under ETLS.
So we can now begin to apply our restrictions.” When contacted on the apex bank’s efforts to check the situation, the Acting Director, Monetary Policy Department of Central Bank of Nigeria (CBN), Dr. Ladi Bala-Keffi, said:
“Exchange rate plays a big role in inflation rate in Nigeria. Let me add that in the course of our studies, when we are doing some research, we discovered that this exchange rate differential has made our currency cheap.
“For example, in countries that are our neighbours, the Cefa is stronger than our naira.
“So since the Cefa is stronger than our naira, the middlemen have been collecting agric produce from our farmers, collecting what the farmers are producing from them and smuggling them out of the country to neighbouring countries.
“And they are doing that because they are taking advantage of the exchange rate arbitrage between the naira and the dollar.
So now, it’s cheaper for them to buy food in naira and export and take to other countries than for them to sell here in Nigeria.”
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