Business & Economy - News - January 19, 2021

CBN to release 300,000MT of maize in February

Targets 30% cut in price per tonne

Targeting over 30 percent drop in the price of a tonne of maize, the Central Bank of Nigeria (CBN) says it will release another 300,000 metric tonnes of maize to the market in February.

The planned release is a follow up to about 30,000 tonnes of the commodity issued last year from the National Strategic Grain Reserve to the Poultry Association of Nigeria (PAN) at a subsidized rate.

President Muhammadu Buhari gave the directive for the apex bank to make the issue, to cushion the impact of the scarcity of the commodity in the country last year.

Acute shortage
Following the government’s directive early last year for the closure of the country’s borders and the restriction of movement in the wake of the outbreak of the coronavirus pandemic, the country was hit by an acute shortage of several agricultural products, including maize.
The directive on the border closure came at a time the farmers, particularly in the northern part of the country, were unable to access their farmlands during the planting season due to the high insecurity in the area as a result of series of attacks by herdsmen and militants.
To worsen the situation, the CBN, in July, 2020, directed all authorized dealers to discontinue further importation of maize/corn into the country to encourage local production of the commodity.
The directive appeared to have turned out to be counter-productive, with the scarcity of the commodity driving its price of the commodity from about N70,000 per tonne to between N165,000 and N175,000 per tonne.

CBN’s intervention

The apex bank said in a statement on Monday that it would in the next two weeks release from its strategic reserves under the Anchor Borrowers’ Programme (ABP) about 300,000 metric tonnes into the Nigerian market.

The intervention is expected to help reduce the current high price of maize from between N155,000 and N175,000 per metric tonne to about N120,000 per tonne, or about 31.4 per cent reduction.

In the last quarter of 2020, the CBN and the Nigeria Customs Service (NCS collaborated to facilitate import waivers to four agro-processing companies to import 262,000 tonnes of maize to bridge the shortfall in production and augment local production.

“It is expected that with the release of 300,000 metric tonnes of maize in February 2021, the prices of maize in the Nigerian market will drop significantly, thereby increasing demand for the crop and ultimately enhancing the gains of maize farmers,” the CBN said in its statement.

Why the scarcity
The National President of the Maize Association of Nigeria (MAAN), Bello Abubakar, blamed the current shortfall in the quantity of maize available in the market, to include insecurity around the major maize producing belt of Niger, Kaduna, Katsina, Zamfara and part of Kano states.

Also speaking Edwin Uche, a prime anchor under the maize production programme identified banditry, and drought in some parts of the country in 2020 as well as activities of middlemen as factors responsible for the current high price of the commodity.

Last year, the CBN provided credit facility and seed to maize farmers and support to enable them increase their yield, particularly due to the impact of Coronavirus (COVID-19) pandemic.

As part of the Bank’s financing framework, the CBN facilitated the funding of maize farmers and processors through the Anchor Borrowers’ Programme (ABP) Commodity Association, Private/Prime Anchors, State governments, Maize Aggregation Scheme (MAS), and the Commercial Agricultural Credit Scheme (CACS).

Mr Abubakar said over 200,000 farmers were targeted to produce more than 25 million metric tonnes of maize in the 2020/2021 planting season., adding that the credit secured by the CBN were distributed to members along the maize value chain, nation-wide.

He said he was optimistic that the support of the CBN would boost production and ultimately ensure availability as well as stability in the price of the commodity.

In spite of cases of insecurity in some parts of the country, he said farmers were committed to meeting the objective of food security.

Mr Abubakar also charged middlemen not to take advantage of the supply gap to hike the price of the grains, assuring that farmers would maintain reasonable price.

Also, he urged the Federal Government to put in place mechanism to protect farmers from market-triggered shocks.

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