WHEAT, which is used to make a variety of fundamental foods such as bread and biscuits, may soon be added to the list of commodities prohibited by the Central Bank of Nigeria (CBN) from receiving official forex allocation, it was learned over the weekend.
The consequence is that any company that relies on imported wheat for its operations will seek an alternate source of FX when the apex bank imposes the restriction.
The Central Bank of Nigeria (CBN) warned over the weekend that $2 billion is spent yearly on wheat imports, eroding the country’s foreign reserves.
Only 1% (about 63,000 metric tonnes) of the five to six million metric tonnes (MT) of wheat consumed in Nigeria is produced locally, according to the central bank.
The CBN intends to fill the void by launching a big local wheat production.
“Wheat will be added to the forex restriction list at any time now,” a CBN insider said.
As part of its efforts to improve local production, the government has imported hybrid wheat seeds for dry season cultivation, according to the source.
He said the CBN’s arrangement is to put wheat farmers in a position to meet the high demand for the item.
Bread, noodles, pasta, biscuits (cookies), semolina, and various beverages, such as wheat beer and malted milk, are all made with wheat flour.
Mr. Philip Yila Yusuf, Director, CBN Development Finance Department, told a wheat conference and stakeholders’ engagement in Abuja over the weekend.
“Wheat is the second-largest contribution to the country’s food import cost, putting strain on the country’s foreign reserves.”
The highest is rice, which is now on the restricted list.
According to Yusuf, the top bank’s action had become necessary due to rising local wheat demand and an inability to provide it.
“The CBN intends to solve critical concerns in the value chain by financing enormous wheat production in Nigeria, as well as facilitating the continued availability of high yield seed varieties in the country and improving overall productivity,” he said.
“The CBN faced a massive problem that would necessitate deliberate efforts to overcome.”
He claimed that the wheat value chain has huge potential to have a substantial impact on the agricultural economy.
After making significant headway in the rice and maize value chains, the CBN will concentrate its efforts on the wheat value chain during the 2021/2022 dry season planting.
Rice, chicken products, and fish are among imported agricultural items that consume a lot of foreign cash but are on the CBN’s Forex limitation list.
At the meeting, Kano State Governor Abdullahi Ganduje asked the CBN to speed up the process of distributing money, emphasizing the need of collaboration among stakeholders in the wheat value chain in advancing Nigeria’s goal of becoming self-sufficient in wheat production.
Ganduje, who was represented by his deputy, Dr. Nasiru Yusuf Gawuna, urged all parties involved to be transparent in their dealings and to begin planning for wheat growing and production.
Mohammed Abubakar, the Minister of Agriculture and Rural Development, was represented by Abdullahi Garba, who expressed disappointment that the country’s wheat import costs have continued to rise in recent years.
He asked all parties to work together to reverse the trend by increasing value chain investment.