• Importation of rice, toothpicks, furniture gulps N100bn in first quarter
The federal government spent a total of $4 billion (N813 billion) in 2013 on items which are currently being produced or could be competitively produced in the country.
The amount spent on six items including rice, sugar, wheat, fish, furniture, milk and textiles in the period under review represented about one-fifth of the country’s total budget of about N4 trillion.
It also emerged that the sum of N100 billion had been expended on importation of rice, toothpicks, milk and furniture in the first quarter of 2015, according to figures from the Central Bank of Nigeria (CBN).
The disclosures came amid concerns over the serious effects of the steep drop in global oil prices and depleted fiscal buffers as well as the negative consequences of spending scarce resources on these items. Worried by the grave implications of these developments, the CBN Governor, Mr. Godwin Emefiele, had restricted over 40 items from accessing foreign exchange at the official window.
The apex bank boss had while defending the policy limits on forex argued passionately that ‘Nigeria cannot attain its true potential by simply importing everything’. He further argued that the continued importation of these items had prevented growth of local industries and led to the empowerment of other economies at the expense of Nigerians.
He said: “Do we as a people, realise how many jobs we are creating for other countries by ignoring local production and simply concentrating on imports.” Emefiele’s resolve to tighten the noose on specific imports is in line with the policy direction of the Buhari administration which has consistently emphasised on maximising resources, blocking leakages and cutting waste in order to free up funds for development projects across the country. President Buhari had promised during the campaigns leading to his emergence as president that he would implement policies that would discourage unnecessary importation of goods that could be produced in the country to encourage local production.
Meanwhile, a breakdown of the amount spent on importation of goods showed that the sum N752 billion was spent on rice; N464 billion on sugar, N1.5 billion on wheat, while fish importation gulped N1.3 billion. Textile and furniture accounted for N17.4 billion and N31 billion respectively.
Emefiele had further revealed that on the average, the country spends about N1.3 trillion annually on the banned items.
He said the way forward was to identify productive sectors of the economy and advance credit towards these sectors as well as impose proper monitoring and performance measures in order to ensure that the goals of increased employment and poverty reduction are attained. Only recently, Emefiele disclosed that the country’s external reserves had risen to $31.89 billion in July from about $29 billion, attributing the increase to strong efforts of President Buhari to plug all leakages, as well as the vigilant demand management of the central bank.
Also at the weekend, while lamenting the loss of about N20 billion annually in revenue from the importation of palm oil into the country, the CBN Governor said the bank would collaborate with government officials to extend the kind of programme for rice substitution into palm oil substitution including other agricultural produce where the country has comparative advantage.
“We will encourage Nigerian banks to give you support and CBN will try to sow its seed to support your work,” he promised.