Uche Usim, Abuja
Economic experts have frowned at President Muhammadu Buhari’s directive to the Central Bank of Nigeria (CBN) to halt foreign exchange allocation to importers of food, in the erroneous belief that Nigeria has attained food sufficiency.
They insist such restriction lies exclusively in the hands of the apex bank management that administer monetary policy, adding that the Presidency should insulate the CBN from its politics.
According to them, President Buhari, in spite of his genuine intentions to grow the economy, may be ignorantly fueling inflation because food importers may no longer order for goods overseas and as such make those consumables extremely expensive, especially as Nigeria is yet to attain food self-sufficiency target.
Reacting to the pronouncement, Oby Ezekwesili, former minister of education, described President Muhammadu Buhari as a “completely out-of-touch leader” over his directive to the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation.
Ezekwesili also lashed out on the president on Twitter, saying he is living in a bubble.
“A completely out-of-touch ‘leader’. He is cocooned away in the grandeur of @AsoRock where they serve him delicatessen and praise-sing to him: ‘ranka dede sir’, your agriculture policy is working wonderfully. All farmers in Nigeria are now billionaires & exporting to the US,” she said.
The CBN said it will proceed with the president’s directive and that the implementation of the forex ban on food import would be in phases.
We all know that @NGRPresident @MBuhari has absolute contempt for Data but we shall go ahead and put out here some of the Knowledge he should have had before making this latest blunder of ‘Directing’ what should be an independent @cenbank to “not give a cent for food import”.
Similarly, Prof Kingsley Moghalu, a former deputy governor of Central Bank of Nigeria, said such an economic policy should not be imposed on the CBN by a political authority, stressing that the bank has lost its independence.
“Nigeria’s entire economy appears to have been sub-contracted to our central bank, including industrial and trade policy. In the process, the economy has fared poorly and the bank has lost its independence. This is sad,” he said.
The former presidential aspirant said the directive is against the independence of the CBN.
He said political interference in economic policies of the apex bank is the major cause of poverty and weak institutions.
“Is @cenbank now a ministry to be “directed” by President @MBuhari ? Article 1(3) of the CBN Act 2007 states, ‘In order to facilitate the achievement of its mandate under this Act…the bank shall be an independent body in the discharge of its functions,” he said.
“The issue here isn’t whether or not CBN should allow access to forex for food imports. It is about whether such an economic policy of a central bank should be imposed by a political authority. A major reason for our poverty, instability and weak economy is weak institutions.
“Our marketplace should be regulated and guided in a rational manner that creates a level playing field. Our economy will not be saved by Ad Hoc political decisions like this, handed down by the very institutions that should be shielded from the whim and caprice of politicians.
“Nigeria’s entire economy appears to have been sub-contracted to our central bank, including industrial and trade policy. In the process the economy has fared poorly and the bank has lost its independence. This is sad!
“@NGRPresident should leave @cenbank alone to discharge its mandate independently within the ambit of the CBN Act, and stop “directing” it. @cenbank should on its part assert its independence (assuming it actually believes it should be independent, but the Act says so, clearly!”, Moghalu said in a series of tweets.
Also commenting on the development, the Managing Director of Cowry Asset Management Limited, Mr Johnson Chukwu, said President Muhammadu Buhari has no authority to direct the CBN Governor on monetary policy matters, despite the fact that he appointed him.
He said the process of appointing a CBN Governor entails securing Senate clearance because the Governor requires independence to function optimally.
He said: “I believe the ban is advisory in nature and not an order. The CBN is an independent body. The president can deploy fiscal tools to achieve what he wants. For instance, he can increase tariffs on food items just to make them commercially unattractive.
“Making certain pronouncements have immediate multiplier effects on the economy. Mr President’s pronouncement is not enforceable. It is advisory and that is how I see it”, he said.
President Muhammadu Buhari, had on Tuesday directed the CBN to stop providing foreign exchange for importation of food into the country.
Buhari made the disclosure on in Daura, Katsina State, when he hosted All Progressives Congress (APC) governors to the 2019 Eid-el-Kabir lunch at his country home.
According to him, the directive is to achieve steady improvement in agricultural production, and attainment of full food security.
In a statement, Senior Special Assistant on Media and Publicity, Garba Shehu, quoted Buhari as saying that the foreign reserve will be conserved and utilised strictly for diversification of the economy, and not to encourage more dependence on foreign food imports.