Africa: Nigeria spends $45M importing French Fries
Dollar scarcity, occasioned by Central Bank of Nigeria (CBN)’s flexible foreign exchange policy, which banned importation of French Fries may have saved the country about $45 million (N14.1 billion) yearly, New Telegraph has learnt.
A top member of All Farmers Association of Nigeria (AFAN) and Chairman, Faniz Groups of Companies, Uchethe chukwu Aniezechukwu, disclosed this in a chat with this newspaper in Lagos. He said the N14billion would have been used to import French fries, a foreign potato chips delicacy.
Aniezechukwu said that the forex policy had made it difficult for fast food operators and supermarket owners to import French Fries , which Nigerians consume with relish. French fries are finger chips made from potatoes, a crop that is widely grown in many parts of the country.
Aniezechukwu noted that importers of French Fries have been groaning over the Central Bank of Nigeria (CBN’s) foreign exchange policy. The amount saved from the importation of French Fries he said, is huge considering the fact that N29.75 billion was budgeted for agriculture in the 2016 budget.
He said that the ongoing economic woes had lowered profit projections of many fast food operators and supermarket owners that display foreign products in their outlets. Besides, he said that the tight dollar restrictions had forced domestic lenders to delay hard currency loans and trade repayments to foreign banks, which increases the risk of default.
The Nigerian economy entered a recession in the second quarter, after persistent low oil prices hammered vital public finances and the naira, prompting foreign investors to flee bond and equities markets, which caused chronic dollar shortages. The CBN floated the currency in June to ease dollar shortages and preserve its dwindling reserves. It allowed the naira to tumble 30 per cent on the day of the float from its 16-month pegged rate of 197 per dollar.
The currency move helped Nigeria’s trade balance gain some ground to stand at minus N196.5 billion in the second quarter, the National Bureau of Statistics (NBS) said from minus N351.3 billion in the first quarter.
“The improvement in export value is largely due to the depreciation in the value of the naira,” it said in a statement. “This development arose from a rise of 63.3 per cent in the value of exports largely due to exchange rate gains combined with a rise of 38.1 per cent in the value of imports against the levels recorded in the preceding quarter.”