Ruga, Fura and Blind Interventions, By Henry Boyo
The news of the Federal Government’s plans to establish Ruga, or cattle colonies throughout the federation started filtering out after President Muhammadu Buhari was re-elected as President, and his party, the All Progressives Congress also won a majority of seats in the National Assembly after the conclusion of the February 2019 elections.
Further confirmation of government’s Ruga plans was made on May 21, 2019, by former Minister for Agriculture, Audu Ogbe, who revealed that land had been selected for Ruga programme in all the states of the federation. The project, according to the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Mohammed Umar, would be provided with necessary facilities to ensure that cattle breeders have access to grazing land, potable water, regular power supply, with provision also for living quarters and schools for the cattle rearers’ children.
Unexpectedly, however, the cost of establishing Ruga settlements has neither been revealed nor appropriated in the 2019 budget! Consequently, critics wonder why the haste to create herdsmen’s settlements when Nigeria’s major roads are presently besieged, according to several reports of victims, by alleged Fulani herdsmen, who kidnap, terrorise and kill travellers on our highways.
Curiously, government has not shown any serious commitment to reduce the intensity of brigandage, kidnapping and farmland destruction by these herdsmen who were, incidentally, earlier identified by Mr. President, himself, as “fleeing” fighters from Muammar Gadaffi’s Libya!
Equally troubling is the latest government directive for all migrants, amongst whom are thousands of herdsmen and those from Niger, Chad and other Sahelian countries to register their immigration status, to presumably, regularise their stay, when in contrast, Nigerians are regularly deported or promptly repatriated from several countries, within and outside Africa, for not having requisite qualification to be residents!
Furthermore, it does not add up that President Buhari would defend “fleeing” terrorists from Libya and elsewhere, against bona fide, peace-loving Nigerians. Nevertheless, Meyitti Allah, the cattle breeders association, has remained an unrepentant supporter of their life patron’s Ruga plan, as they continue to threaten national security, with provocative statements, which have, unexpectedly, attracted no reprimand.
Ironically, the President’s team has not also shown much enthusiasm, for the creative offer from Governor Abdullahi Ganduje of Kano State, to provide adequate land and facilities to accommodate all herdsmen for the development of integrated cattle ranches, which would support an economic value change for slaughtering, packaging and effective distribution of beef and dairy products nationwide. Ganduje also wisely observed that “Ruga is supposed to be for states where the Fulani reside; you cannot implement Ruga where the indigenes are not Fulani.”
Predictably also, the proposed railway line from Niger Republic to Katsina, together with Nigeria’s notoriously porous borders, will invariably complicate the issue of migration and domestic insecurity, while adherence to ECOWAS and AfCFTA protocols may protect the influx of such jobless migrants, who may be recruited by fundamentalists like the dreaded Boko Haram sect, to wreck more havoc on Nigerians.
The above notwithstanding, the leaders of Nigeria’s ruling party and other Northern oligarchs continue to sway, unabashedly, in a locked step with Mr. President’s body language on the nationwide establishment of Ruga, even when traditional leaders and opinion leaders throughout Southern Nigerian and the Middle Belt have bluntly rejected the proposal.
Incidentally, the Central Bank of Nigeria Governor, Godwin Emefiele, was recently rewarded with another five-year term, by President Buhari, even when the governor failed in 2016 to prevent massive devaluation of naira, and also, failed to achieve the CBN’s prime objective of stable and low price levels that would drive inclusive growth. Emefiele has, not surprisingly also, enthusiastically aligned with his benefactor to deny official forex to milk importers so that milk producers will be compelled to develop the local dairy industry.
Arguably, the CBN’s forex ban is clearly precipitate and probably not well-thought-through. Although Emefiele has indicated that the forex ban will save Nigeria about $1.2bn annually, the drawbacks of this ban are also quite formidable. Invariably, the welfare of the current corporate players in the milk market may not have been fairly considered.
Incidentally, FrieslandCampina, who are probably the major local players in this market, are reportedly already strategically supporting local farmers to boost volume and best quality standards in milk production, with $23m additional investment announced in September 2018.
However, it would certainly be more proactive if the CBN engages local milk producers and supports them with reasonably priced loans below five per cent so as to steadily develop and expand a comprehensive dairy business sector. Instructively, the local species of long-horned cows, reportedly, have a daily milk output that is less than 10 per cent of the output from the special cows breeds, used successfully for milk production elsewhere.
In this event, stakeholders would be encouraged to adopt high lactation and tropical disease-resistant foreign breeds, to set up a dairy value chain, complete with standard equipment and facilities for training more farm workers and technicians, while a tested collection and distribution network would be established, before any talk of forex denial to milk importers. Invariably, this process may require a four to five-year gestation period, during which time, access to forex for milk imports can be subject to a stepwise, annual reduction. Ultimately, however, if the rules of ECOWAS and AfCFTA membership are applied, such currency restriction to free trade may not also be applicable to milk imports from any country in Africa.
However, the CBN’s forex denial for milk (fura) imports, will, predictably, have a counter-productive outcome. For example, relative forex scarcity induced by the ban would drive smugglers’ demand for dollars in the parallel market, and inadvertently, spike the naira above N370=$1. Expectedly, higher dollar rates will, similarly, trigger price increases for a wide range of other grey imports, to further compound the existing challenges of high inflation rate, low consumer demand, and rising cost of borrowing, to the horrid discomfort of every Nigerian businessman or income earner!
Instructively, rice importation is a case in point. For example, even though rice importers have also been denied official forex, the reality however, is that, our neighbour, Benin Republic, with barely 12 million people, has now become one of the largest rice importers in the world. Nigeria is undeniably the ultimate destination for the several shiploads of rice annually imported into Benin Republic with dollars sourced from Bureau De Change. Ultimately, Nigeria’s government would, regrettably, receive no duties on the huge rice and now also milk imports, which are indirectly funded from billions of dollars that the CBN sells to the BDCs.
Predictably, the latest forex restriction to local milk companies will also impact negatively on the turnover and profitability of these companies. Similarly, corporate tax income as well as employee tax payments to federal and state governments, respectively, would also decline. Ultimately, the real product of the CBN’s blind forex denial to milk producing companies would be reduced income on all fronts, i.e. government, distributors, transporters, packaging manufacturers, advertisers, etc, while milk companies will become forced to optimise and retrench more staff!
Comparatively, however, the $1.2bn forex spent by milk producers on imports is actually a small fraction of what the NNPC spends annually to import fuel. Any drive for forex conservation, to stimulate import substitution, should probably start with the market for PMS (petrol). Regrettably, however, despite Nigeria’s huge oil resource endowment, over 90 per cent of Nigeria’s PMS is presently still imported and paid for in dollars! So, the question is, why does the CBN not also deny forex access to the NNPC and fuel importers, so that more local fuel refineries and a robust value chain will be fast-tracked, as expected from the forex denial to milk producers?
Despite the unfettered forex access for petrol imports by the NNPC, possibly over 20 million litres are reportedly smuggled through porous borders to subsidise the economy of neigbouring ECOWAS nations with possibly well over $5bn annually.
Nevertheless, according to media reports, members of the Meyetti Allah have readily aligned themselves, also, with the sustenance of the CBN’s denial of forex for milk importation!