Food imports gulped $1.24bn of the foreign exchange supplied by the Central Bank of Nigeria (CBN) between October 2020 to March 2021.
ALEDEH News reports that the forex used for food products imports, however, rose from $121.13m in September to $198.43m in October, $204.76m in November and $305.88m in December, according to the CBN’s data on sectoral utilisation for transactions valid for forex.
The amount of forex used for the importation of food production into the country rose by 118.60 percent to $709.07m in Q4 2020 from $324.37m in Q3.
CBN data showed that food product imports gulped $582.38m forex in the first quarter of 2021, compared to $470.01m in Q1 2020.
Forex supply for food imports rose from $163.60m in January to $197.73m in February but declined to $171.05m in March.
The CBN’s breakdown of sectoral utilisation of forex showed that food imports accounted for about 11.68 percent of the $4.99bn utilised for imports in the country in Q1 2021.
Following the effect of the COVID-19 pandemic on the economy, forex supply for food imports fell by 9.22 percent last year to $1.87bn from $2.06bn in 2019, accounting for about 6.57 percent of the $28.46bn utilised for imports.
The COVID-19-induced slump in crude oil prices in 2020 hammered government finances and the naira, causing dollar shortages, with the external reserves falling to as low as $33.43bn on April 29, 2020.
The naira was devalued by the CBN to 360 per dollar in March 2020 from 306/$1 and to 379/$1 in August.
The country’s external reserves have been fluctuating in recent months, rising from a low of $34.42bn on March 18 to $35.25bn on April 16 but dropped to $34.09bn on May 11.
Meanwhile, the apex bank has spent over $1.3bn to defend the naira between January and February 2021, according to a member of the Monetary Policy Committee, Prof. Adeola Adenikinju.
“It is early in the day to know the extent to which the new policy of CBN to boost remittances will impact on pressures in the foreign exchange market,” he at the MPC meeting held in March.