In Nigeria, foreign currency will no longer be allocated for food and fertilizer imports. This decision, announced on September 10 by President Muhammadu Buhari, aims to reduce the fall in foreign exchange reserves and limit the trade balance deficit.

In Nigeria, President Muhammadu Buhari (pictured) on September 10 ordered the Central Bank (CBN) to cut off access to foreign currency for food and fertilizer imports. The information was relayed by Bloomberg.

This should allow the country to maintain its foreign exchange reserves, which have seriously declined due to the fall in oil prices, and to limit the trade deficit. In particular, the trade balance widened to a record 1.8 trillion naira ($4.7 billion) in the first quarter ended last June.

The announcement comes after the CBN's decision last July to suspend the granting of foreign exchange for corn imports into the country.

It is also part of the policy implemented in recent years by the government to reduce the purchase bill and increase local agricultural production through tax and non-tax incentives.

Some observers believe that restricting foreign exchange on imports could further boost inflation, which has already reached 15.5%, the highest level in two years.

In addition, other analysts indicate that there could be derogations from this measure due to the recent floods that destroyed hundreds of thousands of hectares of maize and rice in the north of the country and caused significant production losses.

As a reminder, Nigeria imported 649 billion naira ($1.7 billion) of food products and live animals in the first quarter of 2020 according to official data.