In a premeditated move to control the effect of border closure in the country, the Central Bank of Nigeria (CBN) disclosed it disbursed a total sum of N171.66 billion through the Commodity Development Initiatives, to finance the agricultural value chain of ten ((10) commodities in three years.
This was disclosed by the CBN Governor, Godwin Emefiele while reading the communique at the end of the two-day MPC meeting on Tuesday in Abuja.
According to the CBN Governor, significant investment has been made over the last three years to sustainably increase domestic food supply. Emefiele stated that the commodities invested in include Cassava, Cocoa, Cotton, Rice, Tomato, Poultry, Livestock and Dairy, Fish, Oil Palm, and Maize.
While providing the breakdown of how the funding was distributed, Emefiele disclosed that four of the food crops received over N140.12 billion or 81.6% of total disbursements. The crops are Cassava, (N11.44 billion); Cotton (N40.47 billion); Rice (N53.40 billion) and Oil palm (N34.81 billion).
Prior to border closure, Emefiele stated while reading the communique that any upward price movement arising from the recent closure of Nigerian land borders on domestic food prices was reactionary and therefore temporary.
“On the impact of the recent closure of Nigerian land borders on domestic food prices, the Committee noted that any upward price movement arising from the closure was reactionary and therefore temporary.
It is, therefore, expected that the outcome of these interventions will close the supply gaps already envisaged in the medium to long term, including dampening domestic prices. It thus, expressed support for the temporal closure of Nigeria’s land borders, noting that securing the country’s land borders should be further enhanced.”
In October 2019, Nigeria’s inflation rate rose to 11.61%, and it represents the highest in 17 months. Specifically, food inflation rose to 14.09% compared to 13.51% in the previous month. Meanwhile, core inflation dropped to 8.88% from 8.94% recorded in September and 11.02% for August 2019.
Recall that Business Influx reported that prices of food items like rice, frozen chicken, tomatoes and other food items had rapidly increased as a result of the border closure.
Business Influx believes that an uptick in inflation is still expected through 2019 as the Federal Government has repeatedly stated it won’t be reversing its stand on the closure of the border until the neighbouring countries comply with standards of cross border movement of goods.
On the other hand, the CBN has also disclosed that the Federal Government might have to reduce the budget benchmark of US$57 per barrel in order to build a fiscal buffer. According to Emefiele, oil prices would remain relatively weak in the foreseeable future.