Border Closure: Nigeria spent N1.85trn on food importation - Report

The chairman of the presidential economic advisory council, Doyin Salami, has said that the Nigerian government spent N1.85 trillion on food imports in 2020 after it closed the country’s land borders.

Mr Salami revealed this during the virtual 2021 National Economic Outlook event organised by the Chartered Institute of Bankers of Nigeria on Tuesday.

In August 2019, Nigeria closed its land border to the movement of goods. This move according to government was to halt the smuggling of weapons, rice among others.

“Despite border closure, our national import of food amounted to N1.85 trillion between January and September, 2020, a 62 per cent increase when compared to the same period in 2019,” Mr Salami was quoted by The Nation as saying.

“This suggests a weakness in our ability to feed ourselves and raises the need to consider review of intervention policies in agriculture.”

According to Mr Salami, 2.5 million farmers are been faced with flooding and other climatic challenges.

“Agriculture continues to decelerate growing at 1.7 per cent year to date while consumer sensitive sectors like manufacturing and distribution continue to contract in double digits,” he said.

“Nigeria’s external imbalances are increasingly precarious with continuing concern over exchange rate differentials.

“By the measure that drives the value of the Naira based on the Naira/dollar inflation differential, the currency should be trading around N439 a dollar at the official market.”

“The COVID-19 shock of 2020 represents the third major shock to the Nigerian economy in 12 years,” he said.

“Ahead of the crisis, the Nigerian economy was contending with a set of pre-existing conditions such as macro instability, stagflation – slow growth and rising inflation, pressure on households – in the form of rising inflation, unemployment, and poverty and pressure on corporate(s) margins – weak consumer and cost pressures,” Mr Salami said.

He blamed the imposed locked down for the severe impact on the transport and hospitality sectors.

“A health crisis morphed into an economic crisis resulting in humanitarian and in some cases, security challenges, a global development visiting great disruption to established norms – largely negative short-term impact but some positives – especially with technology deployment, the full impact of which will manifest in the years ahead,” he said.

“The oil and gas sector, given lower oil prices, OPEC quantity restrictions on Nigeria output and long standing impediments to investment in the sector not to mention the pass through of the sector, the government revenues and forex, to the rest economy is another major driver of recession.”