Nigeria Needs To Reconsider Its Food Import Restrictions on Forex

Nigeria Needs To Reconsider Its Food Import Restrictions on Forex

This plot shows the bankruptcy filings YTD (Year To Date) in the United States by number of cases (i.e. not on monetary value). Retail and hospitality sectors are having a really bad year. Energy is also not feeling fine.  Technology looks really good at just 2%.

 If we have a similar pie chart in Nigeria (how you wish the National Bureau of Statistics can publish it this year instead of Q4 2021), the plot will track the retail and hospitality sectors. However, you will see “agriculture” with a significant percentage, as the lockdown happened at the peak of the subsistence planting season. I do think the current high food prices in Nigeria can be attributed to the massive distortion caused by the lockdown. 

This is the reason I am calling the  government and the central bank to open the ports, and support importers with forex (strictly for food) to import food since, technically, we did not plant enough to generate the necessary supply to handle the huge demand in the nation. Without that import, prices of food items will continue to rise since demand has well outstripped by supply.

Without addressing the supply via short-window food imports, prices will continue to go high as farmers cannot magically produce and grow the crops overnight. A 60-day import window, starting immediately, will go a long way to normalize food prices before the peak of the Christmas season.

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