The Central Bank of Nigeria (CBN) has granted foreign exchange waiver to six dairy companies to import milk into the country. In effect, it reverses a de facto ban on the importation of milk. But only for the largest dairy companies.
The companies receiving forex waivers are FrieslandCampina WAMCO Nigeria; CHI Limited (now owned by Coca-Cola); TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestlé Nigeria PLC and Integrated Dairies Limited.
The CBN introduced the ban in August 2019 in a bid to stop valuable foreign exchange leaving Nigeria, and to thereby stimulate more local production. It mean that milk imports would no longer be eligible under payment terms known as “bills for collection”. These permit an importer to buy on credit. Milk importers would need to fund their naira accounts and open letters of credit.
At the time, Trendtype said the ban was unworkable because of the gap between local supply and demand.
In a face-saving official announcement, the CBN has said that the decision was in line with its objective to increase and improve the local production of milk, its derivatives and other dairy products. The CBN has advised all companies not on the list to cancel any imports of milk.
The CBN has explained the waiver because the six dairy companies given the foreign exchange waiver had showed sufficient support for the CBN’s backward integration programme in order to enhance their capacity and improve local milk production.