- The recently issued directive by the Central Bank of Nigeria (CBN) to ban the importation of maize has been described as untimely, with potential harm to the poultry industry in Nigeria.
- The policy could further compound the troubles of poultry farmers, given that maize, which accounts for more than 50 per cent of poultry feed material, is currently very scarce and, where available, very costly.
- Ikechukwu Kelikume, Project Director of the Lagos Business School Agribusiness Programme, stated that the situation spells doom for poultry farmers across the country who are beginning to cut down on production due to the high cost of poultry feed.
The recently issued directive by the Central Bank of Nigeria (CBN) to ban the importation of maize has been described as untimely, with potential harm to the poultry industry in Nigeria. On 13 July, Nigeria’s apex bank restricted the importation of maize through the official CBN official forex window.
It centred its decision on the need to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and replace jobs lost as a result of the ongoing COVID-19 pandemic.
However, Ikechukwu Kelikume, Project Director of the Lagos Business School Agribusiness Programme, noted that the policy could further compound the troubles of poultry farmers, given that maize, which accounts for more than 50 per cent of poultry feed material, is currently very scarce and, where available, very costly, even as prices continue to rise.
Although acknowledging that the earlier Agric, Small and Medium Enterprise Scheme policies of the CBN and the Anchor Borrowers Program have been largely successful, he said that the current decision to discontinue the processing of Form M (a mandatory statutory document to be completed by all importers for the importation of goods into Nigeria) for Maize importation could reverse the gains of those interventions.
On the effects of the CBN directive, Mr Kelikume said: “The situation spells doom for poultry farmers across the country who are beginning to cut down on production because of the high cost of feed and imported medication for the birds. A negative spillover effect of the high cost of feed is the scarcity of eggs and a consequent rise in its price across the country. The implications of the current challenges in the maize value chain are that the gains of employing more people in the agricultural sector will be rolled back in the coming months.”
“As it stands, there is no alternative for the poultry farmers, as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business. This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years. Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood.”
Mr Kelikume said the decision by the central bank to ban the importation of maize was too sudden and urged the CBN to reverse the decision.
“As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of Maize/Corn must be revisited. It is expedient at this time for the Central Bank to allow importers of Maize to import it through the CBN Foreign exchange window, to close the gap in maize shortage while preparing for a phased discontinuation of maize importation in the country,” he said.
He estimates the total maize value chain shortfall to be about 100,000 metric tons, which translates into an import bill of less than $20 million, defining it as a marginal import burden, even in the current tight foreign exchange situation, and a small price to pay to save the poultry industry.
The director of the LBS agribusiness system further advised, “The time to act is now. The government must put its mechanism in place to import Maize into the country as a temporary measure to plug the pending scarcity that is imminent in the last quarter of the year 2020. Nigeria has a high production potential for maize. Notwithstanding, the current challenge is that the production and supply bottlenecks in the sector have first to be checkmated for any meaningful import restriction measure to be effective.”