The Central Bank of Nigeria (CBN), has donated a total of 2.15 million bags of fertilizers, worth over N100 billion to the Federal Ministry of Agriculture and Food Security.
The donation, according to the Governor of the CBN, Olayemi Cardoso, is to enhance the nation’s food production capacity and curb the escalating food inflation and ultimately ensure price stability.
Cardoso who disclosed this during his visit to the Minister of Agriculture and Food Security, Abubakar Kyari, on Wednesday, said the Central Bank of Nigeria places a significant emphasis on maintaining price stability as one of its primary mandates and food prices is a crucial component of inflation, especially considering that a substantial portion of household expenditure in Nigeria is allocated towards food and non-alcoholic beverages.
“This reinforces the critical need to address food inflation as a pivotal aspect of managing overall headline inflation rates,” Cardoso said.
He noted that while the CBN has been implementing several measures to curb inflation, in the short term, the inflationary pressures have remained predominantly driven by escalating food prices.
He explained that while transient inflationary pressures may persist, the government anticipates substantial alleviation by the third quarter of 2024.
“This is precisely why we convene today to strengthen our collaboration with the Ministry of Agriculture with a shared objective of mitigating the surge in food prices. In alignment with our strategic 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,” the CBN Governor said.
“In this light, we aim to extend our support and foster closer ties with ministries, departments and agencies (MDAs) that bear the mandate and expertise to undertake these critical initiatives.
“Consequently, we aim to enhance our partnership with the Ministry of Agriculture, thereby bolstering your endeavours to enhance food productivity and security, and ultimately, curbing food inflation and fortifying our pursuit of price stability.
“In pursuit of these goals, we are delighted to announce the allocation of 2.15 million bags of fertilizer valued at over N100 billion, which we’re humbly handing over to the Ministry of Agriculture and Food Security. This contribution from the Central Bank aims to amplify food production capabilities and foster price stabilization within the agricultural sector.
“My team and I reiterate our unwavering commitment to prioritising price stability and instilling confidence in the Nigerian economy by upholding consumer price stability and ensuring a balanced foreign exchange market.
“Despite the prevailing challenges posed by inflation and currency depreciation, we remain resolute in our determination to surmount these obstacles. Our resolve lies in implementing policies that cultivate a resilient macroeconomic environment and enhance the welfare of all Nigerians.
In his remarks, Abubakar Kyari noted that the agriculture sector had recently been challenged by the COVID-19 pandemic, flooding, climate change as well as the Naira redesign policy, which according to him, had adversely affected farmers at the grassroots.
He said those effects and some conflicts here and insecurity there, really impacted on agricultural production. “But I’m happy to say that most of those things that I mentioned are on the decline, insecurity is on the decline,” Kyari said, adding, “we are beginning to mitigate against climate change by incentivizing farming activities in agriculture.
“Fertilizer 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. We have right now a program called ‘the National Agricultural Growth Scheme’ that has been supported by the 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.”
The Minister stressed the need to boost repairs of irrigation infrastructure to support the all-year farming system in the country.
The Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, in his remarks, noted that Nigeria was not alone in the issue of high food prices, which according to him is escalating due to the high cost of energy.
He commended the efforts of the CBN, stating that the efforts aimed at addressing food challenges in the country must be encouraged.
“We are competing with other countries in the world and agriculture is the most distorted in international trade, and because of that, collaboration between institutions is necessary,” he said.
Speaking further, Bagudu acknowledged that in the 2024 budget, agriculture received close to N1 trillion, stating that the significant increase in budgetary allocation is consistent with the renewed hope agenda of President Tinubu.