Dipo Olowookere
By Dipo Olowookere
When a few days ago, the Central Bank of Nigeria (CBN) directed authorised foreign exchange (forex) dealers in the country to stop selling Dollars to importers of maize, many farmers jumped for joy.
They were happy because like in the rice sector, where the ban on importation has been largely effective, this policy will most likely make them richer because of the possible rise in demand.
But the Director of the Lagos Business School Agribusiness Programme, Dr Ikechukwu Kelikume, has warned that the policy may cripple the poultry industry, where relies on the commodity to feed their birds.
The don described the forex ban on maize imports as ill-timed, with potentially negative consequences for the struggling sector.
He said maize, which constitutes over 50 per cent of poultry feed content, is currently very scare and where available, is very expensive, even as the price keeps rising.
Although he admitted that the CBN’s earlier policies of Agric, Small and Medium enterprise scheme and the Anchor Borrowers Programme have been largely successful, he opined that the current decision to discontinue the processing of Form M for the importation of Maize could reverse the gains of those interventions.
Business Post reports that on July 13, 2020, the apex bank announced restricting access for the importation of maize, explaining that the decision was taken “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.”
But for Mr Kelikume, “The situation spells doom for poultry farmers across the country who are beginning to cut down on production because of the high cost of feed and imported medication for the birds.”
He stressed that, “A negative spillover effect of the high cost of feed is the scarcity of eggs and a consequent rise in its price across the country.”
The don noted that, “The implications of the current challenges in the maize value chain are that the gains of employing more people in the agricultural sector will be rolled back in the coming months.”
“As it stands, there is no alternative for the poultry farmers, as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business.
“This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years.
“Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood,” he added.
The university teacher stated that the apex bank’s decision to ban maize importation was too abrupt, urging the CBN to reverse the decision.
“As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of Maize/Corn must be revisited.
“It is expedient at this time for the Central Bank to allow importers of maize to import it through the CBN Foreign exchange window, to close the gap in maize shortage while preparing for phased discontinuation of maize importation in the country,” he submitted.
Mr Kelikume estimates the current shortfall in the maize value chain to be around 100,000 metric tons, which translates to an import bill of less than $20 million, describing that as a negligible import burden, even in the current tight foreign exchange situation, and a small price to pay to salvage the poultry sector.
“The time to act is now. The government must put its mechanism in place to import Maize into the country as a temporary measure to plug the pending scarcity that is imminent in the last quarter of the year 2020. Nigeria has a high production potential for maize.
“Notwithstanding, the current challenge is that the production and supply bottlenecks in the sector have first to be checkmated for any meaningful import restriction measure to be effective,” the LBS Agribusiness Programme Director further counselled.
