The Central Bank of Nigeria last week handed over 2.5 million bags of assorted fertilisers valued at over N100 billion to the Ministry of Agriculture and Food Security, a gesture aimed at tackling rising cost of food items, Abdulwahab Isa reports

To an average Nigerian household, excessively high food inflation is his income drawback. Other challenges, power, education, and lots more, which are in the essential category of needs, can be addressed after food challenges. In the last three years, Nigeria’s economy has been grappling with a debilitating food shortage.

The monthly inflation report by the National Bureau of Statistics (NBS) is consistent in identifying food inflation as being the major indices behind Nigeria’s trending inflationary pressure. High inflation occasioned by the rising cost of food component has been a consistent pattern in the past few years.

The February inflation data released last weekend by the National Bureau of Statistics is consistent with this pattern. While general inflation rose to 31.70 per cent in February relative to January inflation figure of 29.90 per cent , food inflation notch higher to 37.92 per cent on a year-on-year basis.

The food inflation was 13.57 per cent points higher compared to the rate recorded in February 2023 (24.35%). The pervasive food challenge is rooted in the escalating insecurity around farmers and farmlands in the country.

Options

The government isn’t aloof to the current food crisis. All workable options are being deployed. As a cushioning measure, the Federal Government ordered the release and distribution of 42,000 metric tonnes of grains nationwide.

There is a plan to purchase 60,000 metric tonnes of grains from the Rice Millers Association of Nigeria. The Nigeria Customs Service (NCS) is carrying out intervention on food. The Service recently flagged off sales of subsidised seized bags of rice across Nigeria.

The process was paused as a result of stampede reported in Lagos, which resulted in deaths. While sales of subsidised seized bags of rice is suspended, to be continued later, the Federal Government recently ordered Customs to hand over confiscated truck of assorted grains seized to their owners.

Seizures of food trucks by Customs spanned across commands and formations. Acting on the presidential directive, Nigeria Customs Service in Sokoto/Zamfara Area Command had released 15 seized trucks of grains in its command to the owners. Other zonal commands followed suit.

They released food grains earlier confiscated to their owners on the undertaking that the items would be sold to Nigerians. Customs’ National Public Relations Officer, Abdullahi Maiwada, who confirmed the development in a statement, said the development was in compliance with the presidential directive to boost food sufficiency.

Other tactical initiatives aimed at bringing down food items prices are currently being pursued by the Federal Government.

CBN’s intervention

Price stability is the core mandate of the central bank. In the ensuing scenario of skyrocketing inflation, higher prices of food items form the bulk of the inflation basket. The bank adopts various instruments at its disposal to tackle inflation spikes.

Prior to coming on board of the current management of CBN headed by Mr. Olayemi Cardoso, the bank was very active in developmental financing, a terrain alien to the apex bank’s core mandate. CBN under the watch of immediate past management directly spearheaded intervention programmes.

The current administration at the bank is a stickler to the bank’s primary role of overseeing monetary policy and price stability. Cardoso insists CBN must be refocused to perform its primary role of price stability and monetary policy and desist from branching out to perform functions outside its purview.

Before the exit of the former team headed by Ex Governor, Mr. Godwin Emefiele, the bank had lined up items for interventions in agriculture with fertiliser supply being one of them. To douse the current biting hardship occasioned by high cost of food items, Cardoso in his wisdom decided to hand over tons of inherited bags of fertilisers worth N100 billion to the Ministry of Agriculture and Food Security.

The handing over was performed last week. Cardoso remarked: “As we are all well aware, Hon. Minister, the Central Bank of Nigeria significantly emphasises maintaining price stability as one of its primary mandates. “Food prices are a crucial component of inflation, especially considering that a substantial portion of household expenditure in Nigeria is allocated towards food and nonalcoholic beverages.

“This reinforces the critical need to address food inflation as a pivotal aspect of managing overall headline inflation rates. While the CBN has been implementing comprehensive measures to curb inflation, it is evident that in the short term, inflationary pressures may persist, predominantly driven by escalating food prices.

“This is precisely why we convene today – to strengthen our collaboration with the Ministry of Agriculture to mitigate the surge in food prices.” “In alignment with our strategic.

The apex bank deserves a thumbs up for handing them over to the appropriate ministry for onward release to farmers

shift towards focusing on our fundamental mandate, the CBN has veered away from direct quasi-fiscal interventions and transitioned towards leveraging conventional monetary policy tools for executing monetary policies effectively.

“In this light, we aim to extend our support and foster closer ties with Ministries, Departments, and Agencies (MDAs) with the mandate and expertise to undertake these critical initiatives. “Consequently, we aim to enhance our partnership with the Ministry of Agriculture, bolstering your endeavours to enhance food productivity and security, ultimately curbing food inflation and fortifying our pursuit of price stability,” he said. The CBN gesture was misconstrued in some quarters.

Those with little or no information on the fertilisers queried CBN’s gesture. They interpreted it as a case of revisiting one’s vomit. In a circular posted on its website on Saturday, the apex bank stated that the donation of the blended fertilisers aimed to bolster food security within the country, preferring to distribute them rather than let them go to waste.

The bank stated that it utilised the leftover stock of fertilisers, originally blended for past agricultural interventions. The CBN also reiterated its prior stance that its main function was to oversee monetary policy, and it explicitly denies participation in development financing via intervention programmes.

“The Central Bank of Nigeria has not initiated any new intervention but has rather donated fertilisers from the remnants of its stock, which were blended under its previous interventions in the agricultural sector. “This decision is aimed at supporting domestic agricultural production rather than allowing the fertilisers to remain unused and go to waste.

“We anticipate that the fertilisers will ultimately support our overall objective of price stability, which is being challenged by rising food inflation. “As stated by the Governor of the Central Bank of Nigeria on several occasions, the CBN is realigning its focus towards its core mandate of ensuring monetary and price stability, thus stopping its direct involvement in development finance interventions.

“The CBN will, however, support relevant organisations that possess the expertise and capacity to intervene directly,” the statement reads.

Conquering food insecurity

Responding to the gesture, a thankful Minister of Agriculture and Food Security, Kyari, said the fertiliser would go a long way in contributing to food security, noting that fertiliser constituted the majority cost value in terms of inputs in any agricultural production.

He assured CBN governor that the ministry would ensure fair distribution of the fertilisers among genuine farmers, adding that the agriculture sector had recently been challenged by COVID-19, flooding, climate change as well as the naira redesign policy, which has adversely affected farmers at the grassroots. “Fertiliser constitutes the majority cost value in terms of inputs in any agricultural production. So, we are very happy, and we are extremely grateful for this gesture.

“The gesture is highly appreciated as the agriculture sector had recently been challenged by COVID-19, flooding, climate change as well as the naira redesign policy, which adversely affected farmers at the grassroots. “Those effects and some conflicts here and insecurity there, really impacted on the agricultural production.

“But I am happy to say that most of those things that i mentioned are on the decline, insecurity is on the decline. “Also, we are beginning to mitigate against climate change by incentivising farming activities in agriculture. “The ministry will monitor and ensure fair distribution to farmers, and this will give a boost to our food production.

“Right now, we have a programme, National Agricultural Growth Scheme, that has been supported by African Development Bank to give a 50 per cent subsidy of all inputs to our farmers. But with Mr. President’s intervention we have gone a bit further again, to support farmers in terms of the other percentage,” he said. Speaking further, Kyari stressed the need to boost repairs of irrigation infrastructure to support an all year farming system in the country.

Last line

Rather than abandon the 2.15 million bags of assorted fertilisers to waste, the apex bank deserves a thumbs up for handing them over to the appropriate ministry for onward release to farmers as the gesture will feed into effort to bring down high cost of food items.