‘CBN’s maize import ban will boost local production, stabilise economy’

The Central Bank of Nigeria’s restriction of Forex on the importation of maize has been described as a good move, which will increase local production, empower farmers financially, and stabilise the economy.

Chief Executive Officer of AFEX, Ayodeji Balogun, who revealed this said the apex bank’s timely decision to stop maize importation will avert an impending maize surplus in the market that could negatively affect the market price for local farmers – discouraging them from farming maize in the next planting season.

He said: “If this happens, an impending maize deficit will be unavoidable; hence, the need for the hard call made by the regulatory body. One of CBN’s roles as a policymaker in the agro-sector is to protect farmers’ economy and livelihood. The regulatory body has to choose between protecting the livelihood of 20 million farmers or saving the businesses of corporate entities that are likely to make losses in a single quarter of their financial year as a result of the ban.

“Even though this may seem a difficult decision to make, protecting the livelihood of 20 million smallholder farmers is by far, a more proactive way to stabilise the economy.”

Balogun revealed that an analysis done by the research team of AFEX of a 15-year price trend of the FAO price data for the commodity reveals a three-year cycle of highs and lows.

“For instance, the prices of farm produce are usually high in year-one; motivating farmers to produce more of that same crop in the following year and triggering a supply-demand imbalance leading to a fall in commodity price. When this happens, farmers’ natural response is to shift farming focus to another crop in the next farming season, a decision which then creates further scarcity and hike in the price of the farm produce. This cycle continues.

“As a commodity exchange, we recognise the temporary losses made by some stakeholders. We believe that protecting the interest of everyday farmers first is of great importance, hence our support for the CBN intervention. We believe that the CBN ban is for the overall good of the economy and farmers.

“When it comes to policies and programmes that can potentially impact a vast majority of people’s livelihood and the economy of any nation, data, not sentiment, should drive the conversation and influence decision-making… A data-driven approach is the only way to make informed and impactful decisions.”