NECA seeks suspension of forex restriction on milk importation

Following plan by the Central Bank of Nigeria (CBN), to restrict of foreign exchange (Forex) for milk importation, the Nigeria Employers’ Consultative Association (NECA), has urged the apex bank to suspend the policy, as it has the potential of crippling businesses with attendant job losses. 

The employers argued that due to the gap that would be created between local supply and demand, unscrupulous elements would have a field day importing milk with huge loss of revenue to the government, massive loss of jobs with attendant social consequences.

They argued that if the policy is implemented, consequences will also include capacity underutilisation as the entire food and beverage sector will be adversely affected, as many are dependent, in varying degrees, on the use of milk as an intermediate product.

The Director-General of NECA, Timothy Olawale, who urged the CBN to revisit the policy direction and create an environment for further engagement, said even as he acknowledges the imperative for backward integration on the long term, the proposed restriction of forex is too sudden, and have the potential of crippling businesses which are already struggling.

According to Olawale, without prejudice to the long term benefits of backward integration and the short-term consequences without a deliberate and acceptable plan by critical stakeholders could be catastrophic for local businesses in the value chain.

While proffering a way out of the situation, he urged the CBN to soften its hard-line stance and listen to the concerns of stakeholders.

Olawale said: “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.

“Local production of the product at the scale required to meet domestic need would take between four to five years. The government should support key players in the sector to enable them to invest massively in backward integration.”