On forex restriction for milk importation
Recently the Central Bank of Nigeria (CBN) retracted its intention to restrict allocation of foreign exchange (forex) for milk importation into the country following massive umbrage that greeted the plan by discerning citizens and stakeholders. The CBN governor, Mr. Godwin Emefiele had at the recent Monetary Policy Committee (MPC) meeting in Abuja, announced the planned […]
Recently the Central Bank of Nigeria (CBN) retracted its intention to restrict allocation of foreign exchange (forex) for milk importation into the country following massive umbrage that greeted the plan by discerning citizens and stakeholders. The CBN governor, Mr. Godwin Emefiele had at the recent Monetary Policy Committee (MPC) meeting in Abuja, announced the planned policy restricting allocation of foreign exchange for milk importation into Nigeria.
According to him, In a bid to develop the local diary industry there is the need to protect such by stopping import of milk and save the nation good foreign exchange. In the wake of the announcement, several stakeholders have faulted the decision of the apex bank and appealed to it to retrace its steps on the proposed policy while some economic experts lauded the policy direction.
According to Segun Ajayi-Kadir, Director-General of MAN, the addition of milk to restricted items will have a negative impact on the economy that may lead to downsizing, reduce government revenues and the manufacturing sector’s contribution to Gross Domestic Product (GDP). He laments that CBN’s decision was taken unilaterally without consultation with operators in the dairy industry.
The National secretary of MACBAN, Baba Othman Ngelzarma observes that, “Although a desired long term outcome where local production substitutes importation, implementation of such a policy requires a robust strategy that addresses underlying issues.’’ According to him, MACBAN notes that the National Livestock Transformation Plan of (NLTP) as an integrated plan will holistically solve the historic challenges that have deprived the pastoralists from producing high quantity and quality beef and dairy products demanded by the Nigerian market.
“In view of this, we are advising the CBN to retrace its steps and take a productive role that does not undo the work done to date,” Ngelzarma says. Conversely, a financial expert and Managing Director of Cyber1 Systems Network International, Momoh Aliyu, lauds the policy, remarking that the policy is good and will boost the economy. According to him, backward integration had always been the Federal Government’s dream on foods and beverages, adding that currently, Nigerian Breweries is heavily investing in backward integration by empowering farmers to produce grains locally.
“With the Nigeria population and its rate of consumption of dairy products, it is long overdue to enhance and encourage local productions of dairy products for economic and health reasons,” Aliyu contends. It is against this background that the CBN backtracked from its decision to restrict allocation of forex for milk importation into Nigeria, describing it as a misrepresentation of its position.
According to its Director of Corporate Communications, Mr. Isaac Okoroafor, “The attention of the Central Bank of Nigeria (CBN) has been drawn to attempts by some interests, who feel hurt by the planned policy aimed at promoting the local production of milk in Nigeria. “While we are aware that some of our policies may hurt some business interests, we are thankful to Nigerians for the buy-in and intense interest in the policies of the CBN,”.
Rather than shelving the plan, we advise that the apex bank should re-strategize and engage more stakeholders in the milk industry before coming up with the plan again. The plan is a welcome development at this time when unemployment is hitting the roof and government revenue is shrinking in the midst of a ballooning population. However, the planned restriction of forex for milk importation is rather premature at this time and therefore we wish to advice that the apex bank should rather invest in local production of milk as well as allocate foreign exchange for milk importation so that the market will not be stifled of quality milk products which are very essential sources of protein. The apex bank should take a cue from what has happened in the cement industry where local production has increased remarkably, thereby making bulk cement importation no longer attractive. From the foregoing, it is imperative for the CBN to rethink its plan to jettison the policy on restriction of allocation of foreign exchange for milk importation in the overall interest of the country.
Friday Atufe, a financial journalist, writes from Lagos.