The Central Bank of Nigeria (CBN) has restricted foreign exchange for milk importation to six companies in Nigeria to boost local production. This was disclosed in a circular issued on Tuesday by the apex bank and made available to Nairametrics.
The circular, which was signed by the Director, Trade and Exchange Department, Dr. O.S Nnaji, stated that CBN engaged the manufacturers because they have keyed into its backward integration to enhance their capacity and improve local milk production.
“All authorised dealers are to note that all Forms ‘M’, for the importation of milk and its derivatives shall only be allowed for the following companies. They are FrieslandCampina WAPCO Nigeria, Chi Limited, TG Arla Dairy Product limited, Promasidor Nigeria, Nestle Nigeria and Integrated Dairies Limited.
“For the avoidance of doubt, all established Forms ‘M’ for the importation of milk and its derivatives for companies other than the above for which shipment has not taken place should be cancelled immediately,” the circular stated.
The aforementioned companies are said to have begun investing in local milk production in line with the CBN’s backward integration plan.
According to the Director of Corporate Communications Department at the CBN, Isaac Okorafor, the bank chose to engage the six companies because they showed sufficient willingness and ability and had keyed into the CBN’s backward integration program in order to enhance their capacity and improve local milk production.
Why this matters: As Okoroafor noted, this new program would push the increase of milk production in the country. The CBN plans to increase the current figure of 500,000 metric tonnes to about 550,000 metric tonnes within the next 12 months.
The Director also said that the bank aims to facilitate easier access to funding for dairy investors. This would be done so as to ensure that the country conserves foreign exchange, triggers economic growth and boost employment opportunities in the sector.