The proposed restriction of milk from the foreign exchange market will hurt the dairy industry and put over one million jobs in jeopardy, according to the Lagos Chamber of Commerce and Industry (LCCI).
In a statement signed by Muda Yusuf, director-general of the LCCI, the chamber said the Nigerian economy is not ripe for the policy and argued that it is tantamount to a ban on importation of milk in whatever form as most banks would not process Form M for any product on the CBN forex exclusion list.
“We currently do not have dairy cows in the country,” the chamber said.
“The dominant milk producing system in Nigeria is the Fulani Nomadic System whose cows have a milk yield of less than two litres a day, whereas a good dairy cow will produce an average of 28 litres of milk per day over ten months. During peak lactation, a high yielding dairy cow can produce as high as 60 litres of milk per day.”
The CBN recently said time was ripe to restrict milk importers from the FX market to ensure high local input preference.
The chamber, however, said Nigerian cows have very low yield because of poor genetic composition, poor feeding practices and the laborious nomadic system of breeding, which should first be addressed.
The chamber said there are over one million direct and indirect jobs that will be in jeopardy across the value chains of these industries.
“Enough timeline should be given to diary companies for a sustainable transition from the current state of affairs to the desired level of backward integration in the dairy industry,” the chamber said.
It further recommended robust incentives to attract investors to the supply chain in the dairy industry in line with the backward integration aspiration.
It stated that ministries of Agriculture and Water resources should take on the challenge of driving this change process through the creation of incentives for modern animal husbandry facilities and practices.
“There should be generous support from government to facilitate the importation of cattle breed [dairy cows] suitable for milk production.”
The LCCI said, on account of the foregoing, the CBN should put on hold its proposal to exclude the dairy industry investors from the FX market in order to save the economy of the consequential shocks, business disruptions, investment dislocations and job losses.
