(Ecofin Agency) - The Central Bank of Nigeria ordered commercial banks to stop processing new requests related to corn importation with immediate effect. The institution said the measure aligns with efforts to boost the local production, safeguard rural livelihoods, and increase job creation; efforts that were disrupted due to the coronavirus pandemic.
Moreover, CBN says the new measure will help conserve foreign exchanges as oil revenues dropped following the global slowdown. Many observers see this approach as yet another pressure on consumers in a context where inflation has already reached 15%, the highest level in two years. “You can expect prices to shoot up. I don’t think this is a good time to put this policy in place,” said Ahmed Jinad, an analyst at Meristem Securities in Lagos.
Nigeria is Africa’s second-largest corn producer, after South Africa, but the yield per hectare in the country remains very low at 1.6 tons against 4.6 tons for South Africa. The country imports an average of 400,000 tons of corn a year to offset the gap between demand and supply, according to the US Department of Agriculture (USDA).
As a reminder CBN cut forex access for dairy imports in August 2019.