Against the backdrop of the planned restriction of foreign exchange (forex) for importation of milk by the Central Bank of Nigeria (CBN), the Nigeria Employers’ Consultative Association (NECA) yesterday urged the apex bank to revisit the policy direction and create an environment for further engagement.
Its Director General, Mr. Timothy Olawale, said while members of the Organised Private Sector (OPS) understand and acknowledge the imperative for backward integration on the long term, the proposed restriction of forex is too sudden and have the potential of crippling businesses 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, could be catastrophic for local businesses in the value-chain”, he said.
Canvassing for a long term backward integration plan, the NECA boss stated that “cow husbandry in Nigeria have been proved not to be ideal for milk production but for consumption only. Contrary to the postulation that local cows are good enough for milk production, massive investment would have to be made for the importation of dairy cows for milk production.”
Olawale averred that due to gap that would be created between local supply and demand, unscrupulous elements would have a field day importing milk with attendant loss of revenue to government, massive loss of jobs with attendant social consequences.
Other consequences, he stated, include capacity underutilisation as the entire food and beverage sector would be adversely affected as many are dependent on the use of milk as intermediate product.
While proffering a way out of the situation, he urged CBN to soften its hardline stance and listen to the concerns of stakeholders.
He noted that “the CBN should in the interim suspend the planned restriction and after extensive consultation with all stakeholders revisit the timeline of the implementation of the policy to enable companies plan for alternatives.
He added further, “Local production of the product at the scale required to meet domestic needs would take between four to five years. Government should support key players in the sector to enable them invest massively in backward integration.”