By Charles Adeyinka Adisa
On Tuesday 13th August, 2019, President Muhammadu Buhari directed the Central Bank of Nigeria not to provide foreign exchange for the importation of food, saying his administration has achieved food security. Mr Buhari said this in Daura, Katsina, on Tuesday as he hosted APC governors to Eid-el-Kabir lunch,“Don’t give a cent to anybody to import food into the country,’’ the president was quoted as saying. “We have achieved food security, and for physical security we are not doing badly,’’ he said.
This public pronouncement on a public holiday in his country home, Daura has generated a number of response
- Does the President have the constitutional right to unilaterally order the CBN to make policy changes?
- Is it proper to issue such orders on a public holiday
- Can a President that has not yet inaugurated his cabinet nor given a policy direction for the next 4 years of his administration make such sweeping declaration and order?
- Has Nigeria really achieved food security as claimed by the President or is this just a mere political grandstanding?
- When does the President become an Adviser to the CBN on policy issues? Is it not supposed to be the other way round?
Let us get down to the facts now to answer these questions
The CBN act of 2007 states that the CBN is an independent body. Where does the President derive his authority to order the CBN around. Apart from his constitutional role to appoint the governors and the Directors, there are no lacunae for him to rejig unilaterally the monetary policies of the CBN.
I believe it smacks of unseriousness to make such a profound policy order during lunch with fellow politicians rather than after a Federal executive council meeting. The casualness and the gross naivety he displayed brings serious credibility issue on his capacity to govern a country with 200 million people.
It is very ridiculous that a President who has not yet formed a cabinet will suddenly wake up and declare such profound and fundamental policy. It reflects poor judgement and disregard for due process.
Nigeria still remains largely food insecure as shown in the 2019 Global Food Security Index which places Nigeria 96th out of 113 countries examined. So the President was not only wrong but misleading the public by declaring that Nigeria is food sufficient. Though Nigeria’s import of the staple food – rice – has reduced as well as local production increasing, there is still a big deficit of over two million tonnes of rice that is either smuggled into the country through our porous borders or imported . Food security has also been severely affected by the activities of Fulani Terrorists destroying farms and sacking entire farming communities especially in the food basket regions of Nigeria in the middle belt.
It is little wonder that the UN’s Food and Agriculture Organisation in its current report placed the threat of food insecurity in the country at “serious” level.
In its update of countries requiring external assistance for food, the FAO noted that Nigeria lacked the resources to solve food insecurity.
Though agriculture is a mainstay of the country’s economy, employing approximately two-thirds of its total labour force and contributing 40 per cent to its GDP, at least 7.1 million people face acute food insecurity and require urgent life-saving response and livelihood protection with about 44,000 people exposed to famine, Nigeria suffers “serious level of hunger” according to UN statistics.
According to the latest Global Hunger Index, 32.9 per cent of Nigerian children under the age of five suffered stunted growth due to hunger and malnutrition. Between 2008 and 2016, the country’s GHI level remained at “serious.”
Recognizing the technical and professional competence of the CBN, the act establishing it puts the responsibility of advising government succinctly in Chapter 2e of the act and it says Act as banker and provide economic and financial advice to the Federal Government. Unfortunately the President seems to have changed this by being the Chief Adviser, Instructor and Commander of the Central Bank of Nigeria.
Conclusion : The pronouncement of the President was a faux pas and he needs not only to withdraw the order but to publicly apologize to Nigerians for misleading the public
EXCERPTS OF THE CBN ACT 2007
(1) There is established for Nigeria a body known as the Central
Bank of Nigeria (hereinafter in this Act referred to as “the Bank”).
(2) The Bank shall be a body corporate with perpetual succession
and a common seal and may sue and be sued in its corporate name.
(3) In order to facilitate the achievement of its mandate under this Act
and the Banks and Other Financial Institutions Act, and in line with the
objective of promoting stability and continuity in economic management,
the Bank shall be an independent body in the discharge of its functions.
(4) Subject to the limitations in this Act, the Bank may acquire, hold
and dispose of movable and immovable property for the purpose of its
functions.
- The principal objects of the Bank shall be to –
(a) ensure monetary and price stability;
(b) issue legal tender currency in Nigeria;
(c) maintain external reserves to safeguard the international value of the
legal tender currency;
(d) promote a sound financial system in Nigeria; and
(e) Act as banker and provide economic and financial advice to the
Federal Government.
Professor Adisa MD FWACS, is a public policy analyst and commentator based in Baba, Abia State