Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele Tuesday said the apex bank has concluded plans to restrict access by importers of milk to foreign exchange, saying $1.2 billion spent to import the product annually was unsustainable.
Emefiele said this while fielding questions from journalists at the end of the two-day meeting of the bank’s monetary policy committee in Abuja.
He said the moves became necessary due to the huge forex spent yearly on milk importation.
To control the trend, Emefiele said the apex bank was ready to provide loan facilities for backward integration and milk production in the country.
He said: “We can no longer continue to spend $1.2 to $1.5 billion importing milk into the country, an item that we can produce in Nigeria today.
“And you must have heard me in different forums ask questions that we have seen the importation of milk into Nigeria before many of us were born, precisely over 60years.
“Today, the import of milk portfolio annually stands between $1.2 to $15 billion- that is a very high import into the country- given that we are convinced that it’s a product we can produce in the country. But let’s ask ourselves some questions; what does it really take to produce milk?”
“About three and a half years ago, when the policy on the restriction of foreign exchange started, we considered including milk in list of items that should be restricted from forex,” he further said
He said the CBN had a meeting with oldest producers of milk in to the country. “We had meetings with them and agreed for backward integration and begin the process of development and growing development of producing milk in Nigeria.
“Three and the half years ago, when the policy on the restriction of FX started, we considered including milk on the list of items that should be restricted from forex, but we conjectured based on the kind of sentiments that people will show that we should be very careful.
“We called in the management of the oldest milk importers in Lagos; we held at least three meetings with them. We told them what was to happen and what we decided, and we were trying to appeal to them to integrate backward and begin a process of developing and producing milk in Nigeria.
“Also, to some extent, they should help us reduce the rate of herder-farmer conflict, perhaps by now; the conflicts we are witnessing today won’t be as intense as it is at this time.
“By doing backward integration, it helps to reduce the rate of herders-farmers conflict and we are determined to make milk production in Nigeria a viable economic proposition and we would need to support them,” Emefiele further said.
“We can no longer wait for you to be importing this product into Nigeria. If we restrict FX, anyone who needs a loan for the process will get it from the bank. But, if it is to import milk into the country, I think we are getting to the end of the road and that is what we have discussed, and the era of restriction of FX for the importation of milk is really coming very soon.
“If they will not change their policy, we will not change our policy. We want people to produce milk in Nigeria,” he insisted.
The CBN helmsman said MPC retained the Monetary Policy Rate (MPR) at 13.5 per cent, Cash Reserve Ratio (CRR) at 22.5 per cent, Liquidity Ratio at 30 per cent while the Asymmetric Corridor was retained at +200 -500 basis points around the MPR.
He also said 11 members of the committee voted unanimously to hold all monetary policy rates constant, a decision the CBN boss said, was driven by the need to maintain inflation and price stability.
“It also observed that since interest rates were currently trending downwards, it is safer to await the full impact of these policy actions on the economy before a review of the position of monetary policy,” he said.
