Central bank chief defends planned restriction of forex for milk importation
The Central Bank of Nigeria (CBN) on Tuesday confirmed that its planned policy to restrict allocation of foreign exchange (FOREX) for milk importation and other diary products into the country will soon become effective.
CBN Governor, Mr Godwin Emefiele, who confirmed this while briefing journalists after the Monetary Policy Committee (MPC) in Abuja, said the huge expenditure of between $1.2 billion and $1.5 billion annually on importation of milk was no longer acceptable.
The governor said he told a meeting of the milk importing companies three weeks ago of the need to reduce the high expenditure on milk importation into the country.
“By doing backward integration, it will help in limiting or reducing the rate of herders and farmers conflict in Nigeria. CBN is determined to make milk production in Nigeria a viable economic proposition.
“The CBN is saying if by the time FOREX is restricted for milk importation, and the importers will need a loan to acquire land, or do artificial insemination of the cows, grow the grass or produce water, the CBN will provide the necessary support.
“We are getting to the end of the road for the importation of milk into Nigeria. The era of restriction of foreign exchange for milk importation will come very soon.
“If the milk importers will not change its policy, the CBN will not change its policy. CBN wants milk produced in Nigeria,” Emefiele said.
Speaking further the governor said, “for over sixty years, Nigeria has been importing milk. Today, the import of milk annually stands at between $1,2 to $1,5 billion. That is a very high import product in to the country, given that it’s a product that we are convinced that can be produced in the country.
“Let ask ourselves this question: What really does it take to produce milk? Get the cow and give the cow plenty of water to drink and let the cow eat a lot of grass and the cow positioned in a place without roaming about, that cow gets fat and you can take milk out of it.”The reason some say our cows are not producing much milk is because our cows roam about. They don’t have water to drink. Under the pastoral arrangement, you find out that during raining season you find out that, they are somewhere. When the rain recedes, and dry and hot seasons come, they begin to move from where they are”.
The governor recalled that about three and half years ago, when the policy on restriction of forex started, it considered including milk in the list of items under restriction from Forex, but based on expected sentiment from certain quarters, it was put on hold.
He however disclosed that the apex bank met on three occasions with the management of WAMCO, the oldest milk importing firm into Nigeria, on the need to ” integrate backward and begin the process of development and produce your milk in Nigeria”.
“Unfortunately, after three years, nothing has happened. Some of them said they started pastoralist arrangement or where they go and collect milk. Three weeks ago, we had another meeting, where we said we need to take stock of what you guys are doing because we can no longer continue to spend close to $1.2 to $1.5 billion importing milk to the country, a product we can produce. To some extent, they should help us also to reduce the rate of header, farmer conflict.
“Perhaps, if you had started this journey three years ago with us, whereas 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”, he added.