Here’s why CBN took interim measure to approve emergency maize importation
…as poultry farmers struggle with maize supply 2 months before harvest
Asource in the Central Bank of Nigeria (CBN) has disclosed why the apex bank approved four companies to import maize despite an earlier memo placing maize on the list of items not eligible for foreign exchange.
The CBN had earlier approved– Wacot, 60,000 tons; Chi Farms, 60,000 tons; Crown Flour, 22,000 tons, and Premier Feeds Mills, 120,000 tons – to import the product due to their capacity and already existing infrastructure. A contact from the apex bank explained that the interim measure that led to the selection of the four firms was geared towards stabilising food price and easing Nigeria’s high inflation rate.
A CBN source told BusinessDay, “We are spending a lot by way of credit to local farmers and have no interest in seeing more imports. This was the motivation for stopping the imports … we now expect the huge investment that has been made over the last five years to start yielding fruit.
“However, these four companies are only being allowed to complete the importation process that had started before the ban. And so far this year, 314 Forms M have been processed for maize importation alone.”
However, farmers say the importation would be counterproductive, as the containers would likely arrive at a period of harvest.
Analysts, on the other hand, say technical banning of maize would shoot up prices of the commodity and frustrate manufacturers using it as raw material while creating scarcity.
But the CBN and poultry farmers see merit in the policy.
To increase local production of maize, stimulate economic recovery, safeguard rural livelihoods and increase jobs the CBN on July 13, 2020, directed all authorised dealers to discontinue the processing of Form M for the importation of maize/ corn with immediate effect.
The implementation of the CBN directives of withdrawal of Form M for maize importation added more pressure on the sector, which was already burdened with the scarcity of maize – a fallout of the adverse effects of the COVID-19 pandemic.
Data by the Poultry Association of Nigeria (PAN) show that the price of a metric ton of maize jumped by over 100 percent after the FX ban on the product, from about N90,000 per metric ton in January, the landing price of the product climbed to about N200,000 in August.
According to industry players, especially those in the poultry business, maize, which constitutes over 50 percent of poultry feed, became very scarce, and the price of the product hit a record high. The scarcity of maize and the continuous rise in its cost has dire consequences on not only the poultry farmers but on all associated sectors that are linked directly or indirectly to the poultry value chain.
To manage the high cost of poultry production after the ban on maize imports, the apex bank on August 6 granted four selected companies waiver to urgently bring in 262,000mt because of their capacity and infrastructure available to them at the ports in order to ameliorate the maize scarcity within a short period of time.
“In line with the govern