Silence on FG’s draft policy on dairy products raises concerns

The Federal Government had, early this year, drafted a new National Policy on Dairy Import Duty aimed at encouraging indigenous players in the country’s dairy industry said to be largely dominated by imported dairy products at present. The policy, prepared by the office of the Attorney-General of the Federation and Minister of Justice, was to […]

The Federal Government had, early this year, drafted a new National Policy on Dairy Import Duty aimed at encouraging indigenous players in the country’s dairy industry said to be largely dominated by imported dairy products at present.

The policy, prepared by the office of the Attorney-General of the Federation and Minister of Justice, was to primarily restrict importation of dairy products through upward review of import duty on all imported dairy products from the current  5 to 15 percent.

A copy of the draft policy seen by Daily Trust on Sunday was signed by the past Attorney-General and Minister of Justice, Abubakar Malami, in February 2019 and forwarded to the then minister of Finance for immediate action.

Stakeholders in the sector said the policy had not seen the light of  day, making foreign dairy products to continue to flood the industry.

The policy read in part: “The forgoing becomes necessary in view of the need to create a legitimate avenue for revenue generation through increment of import duty on imported dairy products, encourage local participation in the dairy industry and restrict domination of the industry by foreign and/or local importers of dairy products.

“Essentially, the policy is conceived to promote local content development as well as prevent capital flight arising from importation of dairy products.”

According to the draft, the proposed policy also targets a considerable reduction and removal of import duty on equipment and machinery imported for dairy business depending on the monetary value of such items.

Actors in the industry wondered why the policy has not been operational months after it was sent to the finance ministry for consideration.

A participant at the just concluded 4th Global Dairy Congress Africa in Abuja, Mr Dotun Ayo, said government should come out with robust dairy policy that gives incentives like zero duty on diary equipment instead of the heavy duty on equipment and higher percentage on milk import which makes it impossible for locally produced milk to compete.

A dairy farmer, who is in the know of the draft policy, Ayodotun Ismail, wondered at the silence on the policy since February.

The Managing Director of L & Z Yoghurt, Alhaji MD Abubakar had said 50 percent cut back in milk importation can be achieved within five years through a 15% dairy development levy on powdered milk imports (in addition to the existing tariffs).

This, according to him, will include 100 percent duty on liquid milk and milk products which will discourage importation and accelerate backward integration.

These are some of the things that the draft policy seeks to address but it seems to have gone into KIV (keep in view).

Sources in the ministry confirmed the receipt of the draft but whether it was approved, amended or rejected is unknown to many of them.

Stakeholders in the sector want the policy to become operational as soon as possible to encourage the development of the local dairy products industry.