Forex Ban on Milk Importation By CBN

In Morning Crossfire 2019-08-01 12:53:13
Forex Ban on Milk Importation By CBN
Forex Ban on Milk Importation By CBN

Wemimo introduces the show by saying that the minimum level of consumption of milk and milk products in Nigeria is far from being met. Nigeria has never produced milk in quantities large enough for the local consumers to adopt milk as a staple food. Even with the growth of urban population the demands for milk products have been met essentially by importation.


This is where the Central Bank of Nigeria (CBN) comes into the picture, particularly in the provision of FOREX for importation. The CBN recently reiterated its determination to go ahead with the restriction of foreign exchange for the importation of milk into the country. There is a claim that the policy is aimed at conserving between 1.2 and 1.5 billion dollars which the country spends on the importation of milk every year, earlier on from the former minister of agriculture Audu Ogbeh who also said the milk imported is worth about 1.2 billion dollars yearly.


He also said that the yearly dairy output and demand were estimated at seven hundred thousand metric tonnes and 1300 metric tonnes. This means that Nigeria has a supply gap of six hundred thousand metric tonnes.


Sherif talks about the reason that the CBN gave for the ban on FOREX. The CBN says its focus remains to ensure saving FOREX, creating jobs, investment in local production of milk. Sherif buttresses that most of Nigeria’s dairy processors import milk powder and reconstitute it into liquid milk, dairy products such as yoghurts, cream, and others. The average milk consumption in Nigeria ranges around 20 litres and this is four times below the minimum consumption recommended by the World Health Organization, and between 20 and 25 times less than the European average.


Achike Chude responds by saying it worries people when people who knows how it works come up with this kind of thing. “You ask yourself, is it well thought out? Did they bring in people of understanding to also come and air their views? It is also about looking at the advantages. For instance, it is important to look at how essential milk is for a nation. We are not even meeting up under any circumstances.



"We are saying that the amount we spend on the importation of milk in this country is too high, we need to reduce it.” - Emefiele




“It is not something that the CBN should be championing,” continues Achike. “It is an economic decision that is not under the jurisdiction of the CBN. It is a decision that should be taken by those running the economy. CBN is not the ministry of finance for instance, it is an agency or parastatal at best, it is in charge of monetary or fiscal policies. If the CBN makes a case to relevant authorities and the minister of finance comes and reveals what should be done, then CBN can be given instruction. Even the argument by CBN is very porous because they can as well say we are spending so much money importing petroleum products into the country.”


Segun Ajayi-Kadir while responding says that the “CBN has the same objective with Manufacturers Association of Nigeria (MAN) and the objective is to increase local content, backward integration, to create jobs, and conserve foreign exchange. The area of departure from CBN is in terms of aim and not having a clear-cut route to achieve the objective, and also not taking into cognizance the importance of being on the same page with the major stakeholders. If this is not done, CBN could achieve the reverse of what is expected.”

He believes that the adage: ‘Don’t kill a mosquito with a sledge hammer’ applies to what CBN is doing. Also, in some cases, he says, Nigeria does not have the required inputs for maximizing production. Also, he pointed to limiting infrastructure issues that make it very difficult for new entrants to invest in that sector, and this is a very delicate product, which will need refrigeration from place to place if it is to produced locally.


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Resource Persons: 

  • Achike Chude – In-House Guest, Nigeria Info FM
  • Dr Olusola Olorunnisomo - Dairy Specialist Department of Animal Science University of Ibadan (U.I)
  • Segun Ajayi-Kadir - DG Manufacturers Association of Nigeria (MAN)
  • Gbolahan Olojede – Chartered Accountant, Economic Analyst


Written by Jude Chukwuemeka