Nearly three years after the Central Bank of Nigeria (CBN) released a circular listing 41 items as not valid for Foreign Exchange (Forex) through the official window, some local businesses are beginning to record some gains .
The CBN decision of June 23, 2015 drew reactions from the Manufacturers Association of Nigeria (MAN), the various chambers of commerce and industry. They enquired of CBN’s powers, the economic benefits, policy alternatives, claims of aggravation of economic crisis and persistent calls to end the policy.
The agitations were not exactly misplaced given the infrastructural constraints, lack of capacity to fill the gaps in the immediate and the assessed short to medium term implications; particularly production and employment. CBN’s rationale, therefore, came under inquisition.
A former Governor of CBN, Prof. Chukwuma Soludo, faulted the restrictions, alleging that decisions had become political than economic and that there were better options than experimenting with the wellbeing of millions of Nigerians.
Global Chief Economist, Renaissance Capital, Charles Robertson, corroborated Soludo, saying it is debatable whether foreign capital will be available for government to “turbo-charge” the recovery plans.
However, almost three years into this experiment, the Daily Trust reports some of the visible benefits that have emerged from the vitalisation of the policy.
CBN Governor, Mr. Godwin Emefiele, recently disclosed that the total amount of money disbursed under the Anchor Borrowers Programme (ABP) in partnership with state governments and private sector groups since the commencement of the programme, was N55.526bn to over 250,000 farmers.
Emefiele said the ABP was designed to support smallholder farmers by providing them with the requisite training, tools and funds at single digit interest rates which would enable improved cultivation of key agricultural items such as maize, soybeans, rice, cotton and wheat.
“Two years into the implementation, the programme has contributed to the creation of an estimated 890,000 direct and 2.6 million indirect jobs,” he explained.
The Managing Director of Elephant Group Tunji Owoeye, who is a former President of Rice Importers Association of Nigeria (RIAN), said, “I think we will appreciate it better if we understand where we are coming from. We are coming from a place where four to five years ago rice production was only between one to two million tonnes a year. It’s roughly eight to 10 million tonnes today.”
Rising production of cassava starch
Starch is one of the most abundant substances in nature; a renewable and almost unlimited resource. Starch is produced from root crops. It is mainly used as food, but it can also readily be converted to make paper, textile, adhesive, drugs and building materials.
Managing Director of Psaltry Farms in Molete, Oyo state, Yemisi Iranloye said companies like Guinness and Cadbury are turning to them to reduce their importation of starch.
He said the companies discovered they could get similar quality of starch at far more reduced priced without going through the hassles of importation.
Last December, Unilever opened a $12m Blue Band margarine factory in Ogun State so that it does not have to import margarine from Ghana, as it had in recent years. It is also in talks with suppliers to switch to a locally-sourced flavouring agent for its toothpaste.
Improved financial performance of Okomu Oil and Presco Plc
Two listed companies: Okomu Oil Palm Plc and Presco Plc have been recording impressive performances in the oil palm and rubber production segments of the agricultural sector in the recent years.
They have not only been turning in profits, but have also been declaring dividends to shareholders and paying taxes to government.
Toothpick, tomato paste firms take root
About 250 graduates under the sponsorship of the National Directorate of Employment (NDE) have established a factory that has started producing toothpick and pencil in Akure, Ondo State – the first of its kind in Nigeria.
The idea of local toothpick production was brought up by one of the young graduates. He convinced NDE that the products could be produced with bamboo stems from the state.
The acting Director General of NDE, Mr. Kunle Obayan, said, “We no longer need to import toothpick from China or any other country for that matter. Let us begin to patronise our own from today.”
The NDE also impacted on the tomato industry with the debut of $20m tomato processing facility in Kano State in 2016. It has a daily production capacity of 1,200 metric tonnes and buys tomatoes from farmers.
The country has significant demand for processed tomato, but almost half of the tomato paste found in its markets is imported from China and Italy.
Emefiele recently did the ground-breaking ceremony for Greenfield Egg Pasteurization and Powderization Facility in Ondo state. It also has a poultry section. Today, some analysts have put the Nigerian poultry industry to be worth about N1.2 trillion, comprising about 165 million birds, which produces over 650,000 metric tonnes (mt) of eggs and 290,000mt of poultry, making Nigeria the largest producer of eggs in Africa.The powderisation will allow for the storage of egg for at least 18 months.
The CBN governor who also spoke recently on the 2018 budget estimates and the 2018-2020 Medium Term Expenditure Framework said Nigeria has attracted investment worth $10bn following the import prohibition policy imposed on 41 items.
Analysts have suggested that more companies would spring up from the successes that have been recorded by those who have taken the bull by the horn.