FOREX: Wheat importation is a major factor in the exchange rate crises- CBN

Wheat, the 3rd most widely consumed grain in Nigeria has been a major factor in the exchange rate imbalance, says the Central Bank of Nigeria (CBN).

This was disclosed by the CBN Governor, Mr Godwin Emefiele, who was ably represented by the Deputy Governor, Corporate Services, Mr Edward Lamtek Adamu, at the event held in Jos, the Plateau State capital.

According to Nairametric, CBN also stated that this issue would be addressed through the wheat value chain intervention programme captured under the Nigerian Brown Revolution, which is an offshoot of the Anchor Borrowers’ Programme (ABP).

What the CBN is saying
Emefiele mentioned that through the Nigerian Brown Revolution, the apex bank seeks to save $2 billion spent on importing five million metric tons of wheat annually.

He said, “Wheat is the third most widely consumed grain in Nigeria after maize and rice. It is estimated that the country only produces about one per cent (63,000 metric tons) of the 5-6 million metric tons of the commodity consumed annually in Nigeria. This enormous demand-supply gap is bridged with over $2 billion spent annually on wheat importation. This has made wheat the second highest contributor to the country’s food import bill.”

He added that unless addressed the increasing demand would add more problems to the country’s reserves. He said, “Given the high growth rate of the country’s population and the demographic structure, the demand for wheat is projected to continue to rise. This can only intensify pressure on the country’s reserves unless we take a decisive step to grow wheat locally.”

According to him, the ABP has had success in assisting smallholder farmers in expanding their crop production across the 36 states of the Federation and the Federal Capital Territory (FCT).

“Through the programme, N788.035 billion has been disbursed to about four million farmers through 23 Participating Financial Institutions (PFI). So far, 4.796 million hectares of farmlands have been cultivated under the programme covering 21 commodities,” he added.

Bottomline
The Central Bank has a formidable justification for its intervention in the wheat market.

However, the timely execution of the Nigerian Brown Revolution in a manner that can be maintained when the CBN exists in the wheat market is also virtual to achieving the objective of economic development.