Nigeria’s apex bank has announced a ban on the importation of sugar and wheat to the nation’s foreign exchange markets is in works.
The prices of sugar and wheat are now expected to blow up with the latest restriction, announced a day after the National Bureau of Statistics (NBS) revealed that food inflation rose to 22.95% (year-on-year) in March, the highest in over 12 years.
According to CBN, the ban is aimed at conserving foreign exchange and encouraging local production.
A day before the announcement, CBN governor, Godwin Emefiele, hinted that the restriction was being considered especially due to a local brand’s investments in sugar.
During a visit to the proposed $500 million Dangote sugar processing plant in Nasarawa State on Thursday, April 15, he said the restriction is part of the government’s efforts to reduce reliance on importation and therein drive market dependence on locally manufactured sugar.
“We spend $600m to $1 billion importing sugar into the country annually,” he said.
The government’s FX restriction list has been criticized on numerous occasions as harmful to the market and on consumers’ pockets, especially as local production is not doing enough to meet demands.
Others have questioned the governments true intent bordering on arguments that the ban would create a market monopoly for the Dangote brand, which might lead to unregulatable increases in prices of products.
Thus the argument posits that the government should drive more investments to other local food-producing manufacturers and also work on ensuring quality production to avoid a foreseeable free-market capitalist situation.