NECA urges CBN to suspend planned forex restriction on milk imports

The Nigerian Employers Consultative Association (NECA) has appealed to the Central Bank of Nigeria (CBN) to suspend its planned forex restriction on milk imports, saying that the initiative could potentially cripple businesses in the sector.

The call was made by the Director-General of NECA, Mr Timothy Olawale, on Thursday at a business forum in Lagos, while speaking on the need to gauge the suitability or otherwise of the policy at this time. He noted that the apex bank should engage in extensive consultation with all stakeholders by creating an environment that would enable it to weigh the merits and demerits of the policy in the long term.

“While employers understood and acknowledged the imperative for backward integration in the long-term, the proposed foreign exchange restriction is too sudden and has the potential of crippling businesses that are already struggling.

“Without prejudice to the long-term benefits of backward integration, the short-term consequences, without a deliberate and acceptable plan by critical stakeholders, can be catastrophic for local businesses in the value chain.

“Contrary to the postulation that local cows are good enough for milk production, massive investment will have to be made for the importation of dairy cows for milk production,” Olawale said.

He said that unpatriotic Nigerians are likely to take advantage of the gap that would be created by a shortfall in local supply by importing milk, thereby denying the government of much-needed revenue and risk creating massive retrenchment in the sector in addition to other attendant social consequences.

Olawale who listed other consequences to include capacity under-utilisation as the entire food and beverage sector would be adversely impacted stressed the need for the apex bank to review the timeline of the policy implementation so as to give sector producers enough time to plan for alternatives.

“Government should support key players in the sector to enable them invest massively in backward integration,” he said.

The NECA DG said that continuous consultations and expanded engagement with industry stakeholders should be common feature of the CBN policy thrust.

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