Saturday, April 13Inside Business Africa

In New Policy, CBN Restricts Milk Importation to Six Firms

Image result for cbnObinna Chima in Lagos and James Emejo in Abuja
The Central Bank of Nigeria (CBN) has limited the number of companies involved in importation of milk, its derivatives and dairy products to six.

The companies are: FrieslandCampina WAMCO Nigeria, Chi Limited, TG Arla Dairy Products Limited, Promasidor Nigeria Limited, Nestle Nigeria Plc and Integrated Dairies Limited.

The CBN listed the companies in a circular titled: ‘Milk and Dairy Products Importation,’ dated February 11, 2020, signed by the Director, Trade and Exchange Department, Dr. Ozoemena Nnaji, which unfolded the new policy. THISDAY yesterday obtained a copy of the circular from the CBN website.

The new policy brought to an end the old regime under which the importation of milk was an all-comers’ affair.
The circular explained that the move was part of efforts to increase local production of milk, its derivatives and dairy products.

“As part of efforts to increase local production of milk, its derivatives and dairy products, the central bank has engaged with some companies in the industry who have keyed into the bank’s backward integration programme to enhance their capacity and improved local milk production.

“Accordingly, 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: FrieslandCampina WAMCO Nigeria; Chi Limited; TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestle Nigeria Plc 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. Please ensure strict compliance,” the circular stated.
A Form ‘M’ is a mandatory statutory document to be completed by all importers for importation of goods into Nigeria. It is mandatory for all importers to complete and register Form ‘M’ with authorised dealers at the time of placing orders.

Clarifying the intent of the circular, the Director, Corporate Communications Department at the CBN, Mr. Isaac Okorafor, explained that the bank engaged the six companies because they showed sufficient willingness and ability and had keyed into the CBN’s backward integration programme in order to enhance their capacity and improve local milk production.

Okorafor said the objective of the bank in that sector was to increase milk production from the current figure of 500,000 metric tonnes to about 550,000 metric tonnes within the next 12 months.
According to him, in addition to facilitating easier access to funding for dairy investors, it is the bank’s desire to ensure that the country conserves foreign exchange as well as to formulate policies that will trigger economic growth and boost employment opportunities in the sector.

The CBN had expressed disappointment that the country was spending between $1.2 billion and $1.5 billion annually on milk importation, which it had described as unacceptable.

Owing to this, the CBN Governor, Mr. Godwin Emefiele, had stressed the need for domestic production of milk.
Emefiele had said: “We believe that milk is one of those products that can be produced in Nigeria. Milk importation has been going on in Nigeria for over 60 years. If you Google West African Milk or Friesland Campina today, they say that they have been importing milk and that they have been in Nigeria for over 60 years.

“Today, the import of milk annually stands at $1.2-$1.5 billion. That is a very high import product into the country. Given that it is a product that we are convinced that can be produced in Nigeria.

“The reason some say that our cows are not producing much milk is that our cows roam around; they don’t have water to drink.
“When the policy on the restriction of FX started, we considered including milk to the list. Then we thought that based on the sentiments that people would show, that we should be careful.”

Prior to the latest policy, the central bank had in August last year, banned commercial banks and other authorised dealers from accepting Bills for Collections as means of payment for milk importation and its related products, and had directed that only Letters of Credits (LCs) should be accepted.

The CBN had then stated: “As part of efforts aimed at streamlining payment modes for imports, all authorised dealers are hereby directed to discontinue the processing of imports of milk and its related products on Bills of Collection basis.
“For the avoidance of doubt, the mode of payment in respect of milk and its related products shall henceforth be on the basis of Letters of Credit only. Please ensure strict compliance.”

Source: This Day

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