CBN advised to suspend forex restriction on milk importation
The Central Bank of Nigeria (CBN) has been advised by the Nigeria Employers’ Consultative Association (NECA) to, in the interim, suspend the planned foreign exchange restriction on milk importation.
Director-General of NECA, Timothy Olawale, who gave the advice recently at a business forum in Lagos, noted that the apex bank should engage in extensive consultation with all stakeholders. He said that the CBN should create an environment for further engagement of stakeholders that would enable the apex bank weigh the merits and demerits of the policy in the long term.
“While employers understood and acknowledged the imperative for backward integration on the long-term, the proposed foreign exchange restriction is too sudden and has the potential of crippling businesses which are already struggling.
“‘Without prejudice to the long-term benefits of backward integration, the short-term consequences, without a deliberate and acceptable plan by critical stakeholders, can be catastrophic for local businesses in the value-chain.
“Contrary to the postulation that local cows are good enough for milk production, massive investment will have to be made for the importation of dairy cows for milk production,” Olawale said.
He said that due to the gap that would be created between local supply and demand, unpatriotic citizens would be importing milk, while government loses revenue with massive job losses and attendant social consequences.
The NECA DG, who listed other consequences to include capacity under-utilisation as the entire food and beverage sector would be adversely affected, stressed the need for the apex bank to revisit the timeline of the implementation of the policy to enable companies plan for alternatives.
“Government should support key players in the sector to enable them invest massively in backward integration,” he said.
The NECA boss said that in going forward, continuous and expanded consultation and engagement with stakeholders should be common feature of the CBN policy thrust.
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