CBN allocates N1.73tn for food imports in six months

The Central Bank of Nigeria released $547.7m (N823.19bn at the official exchange rate of N1,503.3/$1, as of June 30, 2024) to Nigerians for the importation of food items in the second quarter of 2024.

The amount is a reduction of $142.48m or 20.6 per cent from $689.88m recorded in the first three months of 2024 and N80.76bn or 8.93 per cent from N903.95bn recorded in Q1 when converted to naira.

This implies that the CBN released a total of N1.73tn for food items importation in six months, according to data from the bank’s quarterly statistics bulletin.

An analysis of the reports on Friday showed that Nigerians spent $164.43m in January, $303.91m in February, and $221.54m in March.

The apex bank also allocated $153.27m in April, $197.21m in May, and $197.22m in June.

This came as it was established that the Federal Government’s plan to reduce the price of food commodities through the implementation of zero duty on selected basic food items is increasingly becoming difficult to achieve.

This challenge is underscored by the alarming increase in the average price of imported food items, which rose to 878.3 price point index in September 2024, reflecting broader economic pressures.

On July 8, 2024, the Federal Government announced a 150-day duty-free import window for food commodities to ensure a reduction in food inflation in Nigeria. The food commodities include maize, husked brown rice, wheat, and cowpeas.

It said the programme was meant to help cushion the effects of various factors contributing to food scarcity and price hikes in the country.

The idea was simple: remove or significantly reduce import duties and value-added tax to encourage an inflow of food imports and drive down consumer prices.

But three months after the government announced the plans, the scheme has failed to take off, majorly due to government bureaucratic process and the failure of the Federal Ministry of Finance to publish a list of importers qualified to participate in the process as required by the guidelines earlier issued by the customs in August.

At a press briefing early this month, the Minister of Finance, Wale Edun, said the government had ordered maize and wheat imports to stabilise the food market.

The National Public Relations Officer of the Nigerian Customs Service, Abdullahi Maiwada, couldn’t be reached when our correspondent called to confirm if the awaited item had been imported.

While the government is yet to begin implementation of the policy, the price of imported food has continued to increase.

According to the National Bureau of Statistics monthly inflation report, the new figure indicated a rise of 30.6 price index or 3.61 per cent from 847.7 in August 2024.

Further analysis showed that the average price of imported food has surged by 72.3 percentage points or 8.97 per cent from the 806.0 average price index in July 2024 when the policy was announced and 878.3 in September.

On a year-to-date, this increase is a surge of 185.7 price index points or 26.81 growth from 692.6 in January 2024, indicating more resilience on foreign food products amidst food supply shortages in the country.

A month-by-month analysis showed that in January, Nigeria recorded an imported inflation rate of 26.29 per cent. This increased to 29.81 per cent in February, marking a notable jump of 3.52 per cent in the inflation rate from January.

The trend continued in March, with the imported food inflation rate climbing to 32.89 per cent, an increase of 3.08 per cent from February.

In April, the inflation rate further increased to 34.01 per cent, growing by 1.12 per cent from March, showing a slight deceleration in the rate of increase.

May recorded an imported food inflation rate of 34.83 per cent, indicating a continued upward trend. The increase in the inflation rate is 0.82 per cent from April.

The figure was 806.0 in June, 826.2 in July, 847.7 in August, and 878.3 in September.