• Monday, April 22, 2024
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BusinessDay

NACCIMA faults CBN’s lifting of FX restriction on milk, dairy imports

NACCIMA faults CBN’s MPR hike to 24.75%, says it’s negative for businesses

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has kicked against the lifting of the foreign exchange restrictions placed on the importation of milk and dairy products by the Central Bank of Nigeria (CBN), warning that it could result in the decline of local production.

Dele Oye, NACCIMA’s national president in a statement, expressed concerns over the potential ramifications of the policy change, especially against the backdrop of the Naira’s current depreciation and the inconsistencies observed in customs duty payment.

“We acknowledge the Central Bank of Nigeria’s efforts to refine trade policies in alignment with the evolving economic landscape,” he said in the statement.

He went further to say that “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.”

Emphasising the body’s commitment to Nigeria’s growth, Oye said, “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.”

According to Oye, 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.

He added that 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,” Oye added.

He went further to say, “Policy change of this magnitude requires a concomitant strengthening of customs regulations to ensure that all stakeholders are on a level playing field. We recommend a phased approach that would allow domestic producers to adjust to the new competitive landscape while preserving the value of the Naira.”

Oye urged the apex bank to provide a robust support system for local dairy farmers to boost their domestic production, which would reduce over-reliance on imports in the long run.

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

Oye noted that while the body recognises the merit of liberalising the dairy importation process, “we strongly advocate for measures that safeguard the stability of our national currency and promote fair trade practices.”

“We are keen to engage with the Central Bank of Nigeria and other stakeholders in crafting a sustainable path forward that benefits the Nigerian economy and its populace,” Oye reassured.