September 25, 2019 / 06.30AM / Ottoabasi Abasiekong for Proshare WebTV / Header Image Credit: WebTV
The Central Bank of Nigeria has been urged to explore broader stakeholder engagement in driving its policies.
This was the major resolution at the Regulatory Conversations 4.0 organized by the Convention on Business Integrity, CBI in collaboration with Action Aid UK, Proshare Nigeria, Businessday, Nigeria Economic Summit Group, NESG and Lagos Chamber of Commerce and Industry, LCCI.
Discussing the theme "Foreign Exchange Restrictions on Food Imports and Implications for Regulating and Growing the Nigerian Economy" key stakeholders believed the CBN needs to revisit its forex restriction policies on food imports and adopt the approach of a broader engagement.
It specifically focused on the recent FX restrictions on Milk imports which will have huge impact on the Diary Farm Industry and value chain.
The CEO of the Convention on Business Integrity Mr Soji Apampa setting the tone for the discourse at the event highlighted two (2) schools of thought around the CBN policy on foreign exchange restrictions on milk imports.
According to him, the School of Thought A is of the view that the FX restrictions will achieve the following;
Mr Soji Apampa also noted that for the School of Thought B the major concerns include;
This is considering the fact that 70% of the poor people live in rural areas and are involved in food production.
Statistics according to Apampa showed that Nigeria is the country with the highest amount of children with stunted growth, which is now 11m.
This is caused by poor sanitation, hygiene and poor nutrition in terms of what they eat.
Also 90% of food production in the country comes from rural areas.
In this area the School of Thought believes FX allocations to areas like Hajj/Christian Pilgrimage, Fuel Subsidy, Waivers etc has been embroiled in practices like arbitrage that has aggravated corruption in the country.
Mr Apampa also raised the following key questions which are;
At a robust panel session moderated by Mr Olufemi Awoyemi, Chairman of Proshare Nigeria experts and technocrats examined the FX restrictions on Food imports, implications on the economy and the approach the CBN should take.
The Publisher of Businessday Mr Frank Aigbogun giving his perspective stressed that the current FX restriction of food items was not a flexible policy by CBN and ought to take into cognizance the entire value chain of the Diary Industry.
Aigbogun also made a strong case for wider consultations and a graduation process for the implementation of FX restrictions, which should be over a timeline set in agreement with stakeholders.
Political Economist Professor Pat Utomi opined that Nigeria required a National strategy that keys into an Isolated Industrial policy, which will focus on where the nation has endowments.
According to Utomi "The biggest risk of doing business in Nigeria and Africa, is the regulatory risk".
He noted that the FX restrictions is not a sustainable strategy and that the Central Bank has stepped into fiscal policy territory, and has to review its direction.
Mr Muda Yusuf the Director-General of the Lagos Chamber of Commerce and Industry, LCCI was of the view that the range of CBN FX restriction on food imports was part of the wave of economic nationalism at the global level.
Yusuf made a strong case for the fundamentals of the economy to be addressed and effective engagement between the CBN and other key players in the Diary Industry.
"The emphasis should be on enriching the FX policy, building domestic capacity and addressing the structure of the policy" Muda Yusuf said.
He cited the example of the backward integration in the cement industry as an example of how stakeholder engagement helped to shape the policy on domestic production in the country.
Mrs Suzzy Onwuka of the Federal Consumer Competitiveness Protection Council, FCCPC alluded to the need for regulators to engage stakeholders in the industry, to make critical decisions that will affect the economy.
For Mr Oluwasegun Osundipe of the Manufacturers Association of Nigeria, MAN called on the government to put in place a structured stakeholder platform to discuss extensively the issues around the FX restrictions on food imports particularly the Diary industry.
Mr Olufemi Awoyemi, FCA the moderator in summary noted that the "Regulatory Conversation 4.0" which looked at the FX restriction on food imports was a process, not an event and called for an incentive based policy approach not a restriction based pattern.
See pictures from the Regulatory Conversation 4.0 below:
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1. Regulatory Conversations 4.0: Forex Restrictions on Food Imports and Implications For The Economy