The main reason Central Bank of Nigeria’s (CBN) plans to stop issuing foreign exchange to importers of milk was premised on the need for Nigeria to revamp her local diary sector, which has remained moribund due to lack of investors.
Cerainly, there is need to attain self-sufficiency in the country’s diary sector based on the country’s over 180 million population as this would reduce the whopping $1.3 billion spending on milk importation.
Agric experts have suggested that the country needs to establish more diary industries to produce more milk for Nigerians and curb the alarming smuggling and importation of foreign milk produce into the country.
Already keying into this arrangement is Dangote Group, which announced its intention to start production of milk.
Ironically, the lack of government’s active support in the past via a conducive policy environment had for long affected growth of the country’s diary sector.
In fact, if government had shown enough commitment to the sector, Nigeria would have by now started obtaining the highest possible yields per hectare and kilogramme of milk per cow per year.
Currently, Nigeria’s output of milk per cow per day is about 1 litre, compared to other African countries like Kenya and Uganda with between 30 to 40 litres of milk per cow per day.
Compared to Africa and Asia’s average of 0.9 million tonnes and 6.6 million tonnes, respectively, Nigeria’s 0.6 million tonnes of milk production is the lowest in the world, according to PricewaterhouseCoopers (PwC) Nigeria.
The rating agency said in its report that Nigeria consumes an estimated 1.7 million tonnes of milk annually, but her production output only meets about 34 per cent of demand.
Speaking with New Telegraph on the issue, the National Coordinator, LUGAVO, and Women Leader, All Farmers Association of Nigeria (AFAN), Halima Njobdi, explained that Nigerian farmers were in total support of CBN to stop issuing FX to importers of milk.
She said that the move was not a total ban but to deprive milk importers going to the inter-bank sector of the foreign exchange market for FX on milk importation.
According to her, it is long overdue for forex ban on milk importation in the country because it is time to look inward in line with Federal Government’s backward integration programme to empower local farmers and diary investors.
“For health reason, this is long overdue, all imported powdered milk and those produced here are produce from powder, flavour, concentrate and colour and kuka for kindurmi the one you take with fura. Now, talking of milk, the best milk anyone can take is fresh animal milk, it could be from goat, cow, donkey etc, apart from well processed milk from selected grains.
“Forget it, so far, we have enjoyed consuming products from countries with policy for experiments to address redundancy, and Nigeria is now a dumping ground. We have to start somewhere and gradually we will get out of air chemical, food chemical, water chemical, drugs chemical, clothes chemicals, your mosquito nets chemicals when ordinarily mosquitoes cannot penetrate the nets, why chemicals?
Whoever came up with the ban must have tales to tell because it is meant to develop our diary sector,” Njobdi explained.
For Dr. Musa Hassan, the apex bank’s FX restriction for importers of milk is a welcome development.
While expressing apprehension over likely hike in the price, he suggested the need for price control and also to forestall possible scarcity in the market.
He said: “It all depends on how much dedication and internal control and efficiency demonstrated by the producers and consumers in price control.”
Another farmer, who simply gave her name as Grace, said CBN’s move was in the right direction in all ramifications, saying that it will empower job opportunities for small holder milk producers and diary companies in the country.
Her words: “It’s really not a total ban on importation, but they will not be qualified for forex just like the case of rice. But what impact has this ban created? The cost of rice is still high years after the ban on rice import across land borders. Business and individuals can still source for forex at a higher rate and get this milk and dairy products into the country, thereby making the cost very high.
“What we need is more state of the art ranches at least in major cities. Loans should be available at single digit rate for importation of milk harvesting and processing equipment just like the CBN boss said. My worry is commitment to execution.
“We need small holder milk producers that will offload their produce to bigger factories and this might take a long time to execute. We are yet to have ample traction in the area of rice, now comes milk. So we will still have milk from Holland but at a high price, just the same trend we had for rice.”
So far, Promasidor Nigeria Limited has signed a partnership agreement with Ekiti State Government to drive its backward integration initiative aimed at creating local source of raw materials for its dairy products through the state owned Ikun Dairy Farm.
The pact was sealed on behalf of the partners by the Ekiti State Governor, Dr. John Kayode Fayemi, and the Managing Director of Promasidor Nigeria Limited, Anders Einarsson, in Abuja.
The project will enable Promasidor utilise the potential of Ikun Dairy Farm in producing milk and other products of nutritional value, which help to enhance human growth.
Commenting on the agreement, Fayemi stated that Ekiti State was delighted to collaborate with a major player in the fast-moving consumer goods sector that is deeply committed to the well-being of consumers through its array of quality products.
The governor affirmed that the partnership would enhance the backward integration initiative of Promasidor, in compliance with Federal Government’s directives that companies should seek local source of raw materials for their products, thus ensuring local content development.
As it is, the apex bank’s move on milk import will serve as a channel for sel-sufficiency, employment opportunities and increased nutritional products in the country.