Nigeria Spends USD 1.5 Bn On Milk Imports Annually – The Gov’t Wants To Stop This But People Are Livid

By  |  July 27, 2019

Nigeria wants to put restrictions on the amount of money spent on milk importation which currently stands at USD 1.5 Bn annually. This is aimed at boosting local production but many people are having none of it.

One of the take-homes from last Tuesday’s Monetary Policy Committee meeting was the intention of the Central Bank of Nigeria (CBN) to place restrictions on foreign exchange (FOREX) allocation for the importation of milk into the country.

According to the CBN, the country was spending between USD 1.2 Bn and USD 1.5 Bn on milk imports every year and it had become necessary to limit the amount of foreign exchange channelled into milk importation.

The view from the CBN is that Nigeria has become far too dependent on imported milk products and the proposed backward integration would help grow the economy by triggering developments in local capacity. Cutting foreign supply, they hoped, would increase local production.

But the proposed development haven’t down well with many. At first, the move by the CBN was misconstrued as an outright ban on milk imports, sending online ranters and concerned public policy commentators into overdrive — claims which the CBN governor, Godwin Emefiele, has since refuted as incorrect given that the CBN has no such powers.

In any case, further clarifications on the new policy delivered by Nigeria’s apex bank on Friday didn’t help matters either. In yesterday’s statement, the CBN distanced itself from any talk of an outright ban on the importation of milk into the country.

It stated that for over 60 years, “Nigerian children, and indeed adults, have been made to be heavily dependent on milk imports,” while adding that “the national food security implications of this can easily be imagined, particularly, when it is technically and commercially possible to breed the cows that produce milk in Nigeria.”

Following from the relative success of similar restrictions placed on the importation of commodities like rice, tomatoes, and starch, the CBN wants to make it a lot harder to bring milk into the country while advising milk importers to take advantage of its low-interest loans to start-up local milk production instead of relying heavily on milk imports.

On the surface of things, it does look like the CBN has noble intentions and everyone should be on board with the plan, but scores of Nigerians have taken to both traditional and online media to call out the CBN for what they think is “good intention, bad decision, and terrible execution.”

Nigerians are livid about the proposed restrictions on milk imports for a number of reasons. On the organised front, the Lagos Chamber of Commerce and Industry (LCCI) and the Manufacturers Association of Nigeria (MAN) said they were not consulted before the decision was made, despite claims by the CBN that several meetings were held with industry stakeholders, including FrieslandCampina WAMCO Nigeria PLC; one of Nigeria’s oldest importers of milk, on the issue.

Also, the Director-General of MAN, Segun Ajayi-Kadir, opined that the decision might lead to the downsizing of their staff. He stated that the proposed policy will also cut down on the contribution of the manufacturing sector of the economy to Nigeria’s gross domestic product.

Mr Ajayi-Kadir said the CBN’s decision was unilaterally taken without due consultation with key players in the dairy industry.

For the most part of Friday, social media was agog with rebuttals from people familiar with the matter. Initially, the issue was being politicised as the CBN being used by the federal government to manipulate the people into accepting the proposed RUGA Fulani herdsmen cattle settlement scheme which was vehemently rejected throughout the southern part of the country and consequently thrown out.

But the tone soon changed when Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) dismissed the CBN’s proposed plan as a “non-starter”. The National Secretary of the group whose interests were going to be served by the now-abandoned cattle settlement scheme, Baba Ngelzarma, criticised the plan. 

He told Daily Post on Friday that any policy which does not take into consideration the efforts of the National Livestock Transformation Plan to develop the high quantity and quality beef and dairy products in the country are “doomed to fail.” And the CBN’s new plan didn’t check any of those boxes, nor did they consult with the group before the decision was made.

The discontent from disgruntled Nigerians is based on a number of realities. It is known that most of the milk companies that do the importation bring in raw milk in its dehydrated form into Nigeria. “Finished milk” is hardly ever imported and the process of adding value to the raw product happens in Nigeria — that is, fortification with vitamins/minerals, packaging into tins, sachets etc.

Since most of the value addition happens locally, jobs are created and reasonable income is generated. The bone of contention is that making it more expensive to buy forex for importation of the raw milk will actually hamper an industry that is thought to be already adding reasonable value to the economy, in favour of an industry that is almost non-existent.

The feeling amongst people is that restriction of milk imports will cause undue strain given that Nigeria, at this point in time, lacks the capacity to produce milk for mass consumption. They fear that when milk inevitably becomes scarce due to the import restrictions, the price of the ones available will shoot up and the common man will suffer.

Also, it is common knowledge that the breeds of cattle available in Nigeria are not exactly known for their milk production prowess as much as they are known for beef, meaning that dairy-rich cattle is still imported into the country from Mali, via Niger; a tribute to cutting down importation on one front and seeing it hit the roof on another.

Many fear that the new policy will do more harm than it will ever do good, but the CBN is adamant in its pursuit of FOREX savings, job creation and investments in the local production of milk. And there’s no telling whose ox might be gored in the process.

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