In a new twist to its imposition of Forex restriction on milk importation into the country; the Central Bank of Nigeria (CBN) on Tuesday, February 11, 2020; gave six companies the nod to import the product into the country.
The major policy shift by CBN limited all the Forms ‘M,’ required for importing milk and its derivatives into the country; to the following firms – FrieslandCampina WAMCO Nigeria, Chi Limited, Promasidor Nigeria Limited, Integrated Dairies Limited, Chi Limited and Nestle Nigeria PLC (MSK only).
As a matter of fact, a statement issued by the apex financial body revealed that this mandate was aimed at stimulating local production of milk, its derivatives and dairy products.
Further, it was revealed that the measure rewarded compliance.
Specifically, this works by granting the companies that conformed with the CBN backward integration policy liberty to import milk; while it punished others who did not meet its conditions by withholding approval.
Backward integration refers to a situation where a company takes ownership and control of one or more key component(s) of its supply value chain.
In this context, the six companies that have keyed into the CBN backward integration must have invested directly in major segments of the supply value chain; like dairy farming, milk extraction, etc.
The apex bank in July 2019 said plans to curb forex for milk production was afoot.
The new measure had sweeping industry-wide reverberations; with many Nigerians misconstruing the restriction for an outright ban.
While stakeholders like the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI); claimed they were not carried along, the Nigeria Employers’ Consultative Association (NECA) called on the CBN to revisit the decision; with a view to rescinding it.
The CBN is concertedly seeking to up local milk production from the present 500,000 metric tonnes per annum; to about 550,000 tonnes in twelve months.
The measure aims among other things to promote local production; create employment, conserve foreign exchange and trigger economic growth.