CBN, orders banks to give key fact statement
The CBN Governor, Godwin Emefiele

The Central Bank of Nigeria (CBN) has revealed that milk importation is not banned as against widespread reports. The apex bank also launched a staunch attack on Nigerians who are regarded as “powerful and highly influential traders” following the recent controversies trailing the purported ban on milk importation in Nigeria.

The CBN in an official press release published on its website, late Friday, disclosed that there are ongoing blackmail and undue politicization through social media to frustrate the effort of the apex bank.

CBN, milk importation

The Back Story: Earlier in the week, the CBN Governor, Godwin Emefiele told operators in the industry that milk and some other dairy products would be restricted from accessing foreign exchange, both at the official and parallel markets if they don’t invest in ranches.

  • The decision was reached after the CBN met with dairy product manufacturers.
  • Emefiele further reiterated the decision while reading the communique of the last CBN Monetary Policy Committee’s meeting.
  • Meanwhile, there have been widespread reports that the CBN has reportedly banned the importation of milk and other dairy products.
  • Also, big operators in the industry are reportedly concerned and feel coerced to participate in the CBN’s proposed policy, stressing that the bank failed to check the existing business model that would be suitable for their businesses.

[READ MORE: CBN maintains rates, keeps MPR constant at 13.5%]

CBN Breaks Silence: Meanwhile, in the press release signed by the Director, Corporate Communications, Isaac Okarafor, the CBN dismissed reports of the ban on the importation of milk, explaining what the CBN announcement means.

“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, to mislead the general public by misrepresenting the ordinarily unassailable case for investments in local milk production and the medium to long-term benefits of the planned policy.

“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. As a people-oriented institution, however, we shall remain focused on the overarching and ultimate welfare of the Nigerian masses.

“We, therefore, wish to, reiterate our policy case as it relates to the planned restriction of access to the Nigerian Foreign Exchange market by importers of milk.”

The CBN further stated that its focus is to ensure forex savings, job creation and
investments in the local production of milk.

“About three years ago, we began a policy to encourage backward integration to conserve foreign exchange and create jobs for our people. Included in this policy package was the introduction of the highly successful policy which restricted the sale of forex from the Nigerian foreign exchange market for the importation of some 43 items goods that could be produced in Nigeria.

“Arising from the success of the restriction policy, we approached some milk importers, like we did for rice, tomato and starch and asked them to take advantage of CBN’s low-interest loans to begin local milk production instead of relying endlessly on milk imports.”

What this means: In the meantime, the key takeaway from the CBN report means the CBN did not ban milk importation but restricted forex supply to importers which technically means importers will source for forex at an expensive rate.

By this, consumers may have to brace up to pay more for the milk products. Also, since the demand gap for milk cannot be immediately met, it may also encourage smuggling as witnessed with rice and some of the 42 items already placed under Forex restriction.

[READ FURTHER: Central Bank of Nigeria may ban importation of milk, other dairy products]

Coronation Research

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