How $1.5bn milk import bill discredits ban




The Central Bank of Nigeria (CBN) slipped dairy products into its long, winding list of items that could no longer be imported with foreign exchange (forex) from its official window.

The policy was designed to encourage local production as the price of imported milk surges with unbridled depreciation of the naira.

It was equally designed to conserve the nation’s dwindling forex and consequently stabilise the exchange rate of the naira.

So far, only one of the ambitious aims of the policy has been achieved. The price of a tin of milk has surged to unacceptable rate of N350, up from N150 two years ago. Everyone expected the surge.

The plausible aim of encouraging local production has failed catastrophically. Ironically, imported milk has been priced out of the reach of Nigeria’s 122 million people eking out a living under extreme poverty. Their children are now battling with the malnutrition ailment known as kwashiorkor as they are starved of basic nutrients necessary for healthy living.

Even the relief that the policy was expected to give an embattled naira in the foreign exchange market is still unattainable. The naira still flounders as massive demand pressure forces it into a disorderly retreat in the forex market.

The policy has only succeeded in shifting the pressure from the official window of the CBN to the parallel market. That explains why the margin between the official window and the parallel market has widened to an intolerable rate of N190 per dollar.

The reason is obvious. Milk is still being imported as local production flounders due to lack of incentives and a consequent hostile production environment. Nigeria’s dairy production is grounded on the primitive Fulani nomadic tradition of compelling cows to trek hundreds of kilometers in search of food. They lack the tender care of veterinary doctors that their counterparts even in backward Kenya enjoy.

Nigerian cows produce milk at the mercy of providence. Consequently, their herdsmen manage to squeeze out a scant 1.9 litre of milk per cow per day. Their Kenyan counterparts herded in ranches with adequate foliage produce 10 litres of milk per cow per day. Denmark stands out with a record milk production of 38 litres per cow per day.

CBN has only succeeded in punishing Nigerian consumers by prohibiting the importation of dairy products with forex from the official window.

Imported milk still floods Nigerian markets as local production fails to meet Nigeria’s diminutive annual per capita milk consumption of eight litres which is embarrassingly dwarfed by the global average of 44 liters.

In 2021, Nigeria spent $1.5 billion on milk imports. The trend has not been reversed in 2022 even as forex scarcity worsens. In the first quarter of 2022 milk imports only managed to drop by a scant N4 billion when compared to 2021.

The policy which was seen by many as laudable has failed catastrophically because no one cared to give it the necessary back-up. The debate on the gains of cattle ranching has been crowded out by primordial ethnic and religious cleavages.

The Fulani believe that anything short of the nomadic pattern of pasturage is taboo. Ironically, Nigeria’s worsening food insecurity is partially engendered by that primitive method of pasturing.

It has depleted the nation’s food stock as what is planted by taciturn subsistence farmers is used to feed Fulani cattle. It has also introduced a new chapter into Nigeria’s worsening insecurity as the murderous herdsmen raid villages when farmers complain about destruction of their crops by marauding cattle.

Thousands of lives have been lost in the last seven years to herdsmen merciless raid on farmers villages. The villages are often razed while defenceless residents are mowed down ruthlessly.

Nigeria can no longer feed a population of 211 million people with meat protein and dairy products from cows herded through the nomadic tradition of trekking hundreds of kilometres in search of foliage.

They have to be confined to established ranches where foliage could be reached at the flip of a finger. The cattle must be treated by veterinary doctors. That is the only way we can attain the global average per capita milk production that enables developed countries to produce enough meat protein and dairy for local consumption and exports.

Nigeria with a cattle population estimated at 20 million has no reason to import beef and dairy products. It should instead be exporting them.

Friesland Campina, the Netherland firm manufacturing Peak milk in Nigeria, has proved with conclusive evidence that Nigeria can triple its per capita milk production by dumping its primitive traditional nomadic pasturing.

The company set up a pilot scheme for cattle rearing in Oyo State to boost milk production for its factories in Nigeria. The farm has all the trappings of a modern ranch. It is equipped with everything to make foliage, healthcare delivery and water available for the cattle.

Within the first few years of establishing the pilot scheme, the company was able to break the Nigerian jinx that inhibits milk production. It attained a record 12 litres of milk per cow per day.

The federal government can learn a lot of lessons from Friesland Campina. No one needs to subject cattle to the long trek in search for foliage. It subjects the cows to so much stress that drastically reduces their ability to produce milk.

The call on southern governors to provide land for cattle ranches is a senseless waste of time and energy on frivolous squabble. The vast arable land in northern Nigeria could be used to sort out the problem without rancor.

Besides, the recent surge in the price of diesel has conclusively discredited the primitive idea of loading 28 cows in an articulated truck on the journey from Maiduguri to Lagos.

An articulated truck from Maiduguri to Lagos would burn 1,200 litres of diesel during the journey. At the current pump price of diesel that alone is N1, 020, 000.

That automatically would push the cost of the trip perilously close to N1.5 million. At that rate, each cow is transported to Lagos at the cost of N53, 571. That is the cost of a cow in some parts of the north.

If the cows are herded in a ranch, slaughtered, processed and loaded into a refrigerated truck, one articulated truck can carry the meat of 200 cows.

That reduces the transport cost to a scant N200 per cow. At that rate, consumers will go to the market with money in their pockets and come back with meat in a basket. Now they go with money in a basket and come back with meat in their pockets.

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