The Acting Director Corporate Communications of the Central Bank of Nigeria (CBN), Mr. Isaac Okorafor has attributed the steady growth of Nigeria’s foreign reserves to the import substitution policy of the Bank.
As at Tuesday, Nigeria’s foreign reserve stood at $42.8 billion.
Mr. Okoroafor, who said this at a meeting with Rice Farmers Association of Nigeria (RIFAN) in Abuja, added that the rising balance has vindicated government’s policy on the economy.
The CBN had in 2015 placed a restriction on 41 items that would not be granted forex for importation of goods, especially food that can be produced in the country. However, analysts believe that the growth in the reserves is due to the increase in the price of crude oil.
Crude oil price has gone from $30 per barrel to about $65 for a barrel. Nigeria in its 2018 budget put the benchmark price of oil at $45, which the National Assembly is planning to jerk up by $2 to $47 per barrel.
According to Mr. Okoroafor rice production under the Anchor Borrowers Programme initiated by the CBN has remained a reference point in the bank’s efforts at conserving the nation’s foreign exchange.
“CBN decided to go into the funding of rice and other agricultural produce because we felt that food supply is key if price stability is to be maintained,” he said.
“Food makes up a disproportionately large portion of the basket of prices in the country. We (CBN) decided to target food supply to bring down inflation.
“Second, we went into this business of funding agriculture because we felt that food, especially rice, was a key component of importation in Nigeria.”
While pointing out that rice was a key component in the depletion of the country’s foreign reserves, the Ag. Director said the policy had largely contributed to rebuilding the country’s foreign reserves.
In his comment, RIFAN President, Aminu Goronyo, assured that the association has the capacity to handle the new collaboration with the CBN as over six million rice farmers in the country have been placed on a digitised platform with biometric cards through which each member could receive adequate inputs and funding.
According to him, under the platform, members would enjoy tractor services and inputs suppliers, such as improved seedlings, fertilisers, agro-chemicals, extension services and off-takers.