Import Of Milk And Dairy Products: NACCIMA Defects The CBN Lifts Forex Restrictions

“Higher retail prices...”

NACCIMA fears about the removal of foreign exchange limits on imports of dairy products.

The easing of the limits on the importation of milk and dairy products due to foreign exchange (FX) has been strongly opposed by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

The Central Bank of Nigeria (CBN) informed banks on March 19 that it has decided to remove the limitations on FX access for dairy product imports.

The CBN added milk and dairy products to the list of goods that aren't eligible for FX three years prior to the implementation of the regulation.

In October 2023, the apex bank lifted its ban on 43 things that had previously been prohibited from accessing foreign exchange.

The president of NACCIMA, Dele Oye, responded to the most recent policy change in a statement on Thursday, stating that the local production may decrease if such policies were reinstated.

Oye voiced concerns about the possible effects of the policy change, particularly in light of the ongoing depreciation of the naira and the irregularities seen in the payment of customs duties.

He said: “We acknowledge the Central Bank of Nigeria's efforts to refine trade policies in alignment with the evolving economic landscape.

“The decision to lift restrictions on dairy importation by all entities, barring selected companies, suggests a strategic move towards liberalising the sector, which is commendable from a free-market perspective.

“However, as a professional body deeply invested in the growth and stability of Nigeria's economy, we must express our concerns regarding the potential ramifications of this policy change, especially against the backdrop of the Naira's current depreciation and the inconsistencies observed in customs duty payment.

“The depreciation of the naira has already placed a significant burden on importers, with the increased cost of foreign exchange reflecting on the final prices of goods and services.

“The recent policy shift, while potentially increasing competition and broadening market access, could also exacerbate this burden, leading to higher retail prices for milk and dairy products, ultimately affecting the end consumers.

“In addition, inconsistent customs duty payments have been a significant challenge for businesses in Nigeria.

“This inconsistency not only hampers the ease of doing business but also creates an unpredictable trading environment.

“A policy change of this magnitude requires a concomitant strengthening of customs regulations to ensure that all stakeholders are on a level playing field.”

He added: “This approach should be coupled with a robust support system for local dairy farmers to boost domestic production, thereby reducing over-reliance on imports in the long term.

“Additionally, harmonising customs duty payments to eliminate disparities and foster transparency will be critical to ensuring the success of this policy.”

Also, he stated that NACCIMA will work with the CBN and other key players to develop a long-term strategy that will strengthen the Nigerian economy and benefit the country's people.