The Central Bank of Nigeria (CBN) has urged rice millers to support its programmes to save foreign exchange reserves, improve local production and create jobs for Nigerians.
The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, disclosed this while speaking at the inauguration of the ultra-modern 420 metric tons per day capacity Gerewa Rice Mill in Kano State.
He asked rice mill operators to get involved in paddy cultivation as part of a cooperation with the Nigerian Rice Farmers Association to ensure a long-term supply (RIFAN)
What the CBN governor is saying about rice production
During the opening of Garewa Rice Mill in Kano yesterday, Mr Emefiele advised rice mills throughout the country to embrace the CBN’s backward integration programs aimed at saving foreign exchange reserves. Such actions, he claimed, will improve local production capacity and create jobs.
The CBN governor said, “As we increase the milling capacity of rice nationwide, we are encouraging all rice mills to embrace our backward integration programme and get involved in paddy production to guarantee sustainable supply of paddy to your mills and complement the supply from smallholder farmers.“
He emphasized the importance of rice mills in Nigeria becoming involved in paddy production in order to ensure a steady supply of rice paddy for their mills. He added that the apex bank’s engagement with the Rice Farmers Association of Nigeria (RIFAN) and prime anchors will augment supply from smallholder farmers.
Emefiele pointed out that the number of rice mills in Nigeria had increased from less than ten in 2015 with a combined capacity of less than 350,000 metric tons to over 68 in January with a combined capacity of three million metric tons.
He said that the Anchor Borrowers’ Program (ABP), which was introduced in 2015, had aided enormous growth in the sector, and that roughly ten more mills would be opened this year.
“Food security remains a cardinal deliverable for every developing economy as it serves as the fulcrum of many other economic development indices,” he said.
The CBN governor assured rice millers of collaboration in boosting the rice value chain in Nigeria. He added that the revamped Nigeria Commodity Exchange would facilitate grading, sorting, quality assurance and storage infrastructure for key agricultural commodities.
What you should know about CBN’s interest in rice
- Rice has been a major concern for the Central Bank of Nigeria. Recall in 2015, the CBN issued a circular banning a list of 41 imported goods and services from accessing the official Nigerian foreign exchange market, and rice was at the top of the list.
- The decision was made in order to maintain the stability of the foreign exchange market and ensure the efficient utilization of foreign exchange. As a result, the CBN believed it was Imperative to bar importers of certain goods and services from accessing foreign exchange at Nigerian foreign exchange markets in order to encourage local production of these items.
Bottomline
Inflationary pressures on food remain a major concern in Nigeria. In December 2021, food inflation, which includes all volatile agricultural products, increased by 0.16% points to 17.37%, up from 17.21% the previous month.
As a result, it would be smart if this intervention resulted in a fall in rice prices, which would help the majority of Nigerians who have seen their purchasing power erode.
