CBN move on milk imports, not a blanket ban but Forex restriction, says new report

The Central Bank of Nigeria (CBN) has said it will soon place foreign exchange (forex) restrictions on milk importers into the country.

Speaking to reporters at the end of the bi-monthly Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, CBN Governor, Godwin Emefiele expressed sadness that the country spends between $1.2bn and $1.5bn on milk imports yearly.

“We can no longer continue to spend close to $1.2bn to $1.5bn, importing milk into the country, a product we can produce. To some extent, they (milk importers) should help us also to reduce the rate of herders, farmers conflict,” he said.

Emefiele said that the CBN has held several meetings with milk importers, the first going back as far as three years ago, after the introduction of forex restrictions on 40 items.

“About three and half years ago, when the policy on restriction of forex started, we considered including milk on the list of items under restriction from forex, but we conjectured that based on sentiment some people are bound to express, that we should be very careful.

“We called on the management of the oldest milk importer into Nigeria, WAMCO into Central Bank office in Lagos. We held at least three meetings with them and we told them this would have happened but we decided not to allow it to happen, that we are trying to use the opportunity to appeal to them to do backward integration. ‘Integrate backward and begin the process of development and produce your milk in Nigeria,” he said.

He said the importers “could also support the pastoralists, get them concentrated in one place instead of moving around. Provide them facilities like water, hospitals, and schools. If you are in a community and you want to enjoy the proceeds of that community there is nothing wrong in providing certain things for the communities to blossom. The proceeds of what you get in return will be your milk to recoup your investments. Those are the kind of things we expect companies that are importing milk into Nigeria to do. Unfortunately, after three years, nothing has happened.”

Emefiele wondered that “perhaps, if you had started this journey three years ago with us, perhaps the headers, farmers conflict that we see today would not have been as intense as it is this time. We would need your help at this time because we can no longer wait for you to continue to be importing this product into Nigeria because we are convinced it can be produced in Nigeria. That is our story.”

The CBN Governor suggested to the milk importers that they “can acquire land and begin to graze their own cows and fatten them and get the milk, and then they can also be complemented by pastoralists who own their own small holder cows under a small farming holder arrangement, they can also get milk from them.”

However, it appeard the milk importers ignored the CBN’s advice which has now led to the CBN imposing forex restrictions on milk importation. According to Emefiele, “Nigeria belongs to us, when we have policy, we want people to respect the policy of this country. The amount we spend importing milk is too high. We are saying, by doing backward integration, help us to reduce or limit herders and farmers conflict in Nigeria and we are determined to make milk production in Nigeria a viable economic proposition.”

He said: “By the time we restrict you, if you need loan to acquire land we will give you; if you need loan to grow your grass, we will give you; to produce water, we will give you loan. But that you will continue to import milk in to the country, I think we are getting to the end of road. I will repeat, we are really getting to end of the road. The era of releasing forex for importation is coming to an end, and it will come soon than expected.”

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