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MAN, LCCI kick against CBN’s planned forex restriction for imported milk

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The Lagos Chamber of Commerce and Industries (LCCI) and the Manufacturers Association of Nigeria (MAN) have kicked against the plan to add milk to the list of items banned from accessing the official foreign exchange market.

The organisations expressed their concerns in separate interviews with the News Agency of Nigeria (NAN) on Wednesday in Lagos.

GISTOK recalls that the Central Bank of Nigeria (CBN) had disclosed its plan to add milk and other dairy products to the list of restricted products on the foreign exchange market

Godwin Emefiele, CBN Governor, said that the restriction was to boost local production of dairy products and increase investment in ranches within the country.

He noted that Nigeria currently spends about 1.2 billion dollars to 1.5 billion dollars annually on milk importation.

Reacting to the issue, Segun Ajayi-Kadir, Director-General of MAN, said the addition of milk to restricted items would have a negative impact on the economy that might lead to downsizing, reduce government revenues and the manufacturing sector’s contribution to GDP.

He lamented that CBN’s decision was taken unilaterally without consultation with operators in the dairy industry.

“It is a fact that to backward integrate is the way to grow an economy, but there is a need to be strategic and deliberate about the way to implement the measure.

“MAN has always been at the forefront of resource-based industrialisation; and has always supported backward integration, that is the reason why many manufacturers are exploring local sourcing of raw materials.

“What CBN wants to achieve is almost the same but the style of approach differs and the timing,” he said.

Ajayi-Kadir warned that the policy would have negative effects from its desired purpose and would trigger more smuggling activities into the country.

Ajayi-Kadir stressed the imperative for robust collaboration between the Federal Government and the private sector to boost competitiveness and create enabling environment for businesses especially as Nigeria had signed the African Continental Free Trade Area (AfCFTA) agreement.

Ajayi-Kadir said that MAN would continue to dialogue with the CBN to revisit the policy in the interest of industrial and economic growth.

Also speaking, Africanfarmer Mogaji, Chairman, Agric Sectoral Group, LCCI, expressed concerns about the apex bank’s use of monetary policies to address fiscal issues.

He said that the timing was wrong for the implimentation of the policy as the country currently lacks the structure, infrastructure and capacity to effectively bridge the gaps that would arise from the restriction.

“We do not have enough cows, grasses, vaccines and veterinary facility to make this policy work. “The CBN intervened in rice production but there are no local rice in the market for consumers.

“We do not need milk added to the banned list especially now that the country is facing herders/farmers clash,” he said.

Mogaji urged government to increase the timeline for manufacturers to make appropriate preparation especially as the country’s national dairy output was 700,000 metric tonnes and demand is 1.3 million metric tonnes.

The agriculturist emphasised that the 600,000 metric tonnes supply gap would lead to artificial scarcity, increase cost of milk, exert undue pressure on citizens and increase smuggling of substandard milk into the country.

He urged government to strengthen the capacity of manufacturers by boosting their competitiveness through infrastructural development, investment in existing dairy sector and sustainable cooperatives model to build the agric sector.