NIGERIA – The Organized Private Sector (OPS) in Nigeria has raised concerns and objections regarding the recent decision by the Central Bank of Nigeria (CBN) to lift foreign exchange restrictions on the importation of milk and dairy products.
Members of the sector have cautioned that this move could potentially lead to a decline in local production within the country.
Speaking in separate interviews, key figures within the Organized Private Sector highlighted various issues surrounding the suspension of the restriction and its potential impact on the Nigerian economy.
Dele Oye, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, expressed apprehension about the consequences of the policy shift amid the current depreciation of the naira and inconsistencies in Customs duty payments.
“The recent policy shift, while potentially increasing competition and broadening market access, could also exacerbate this burden, leading to higher retail prices for milk and dairy products, ultimately affecting the end consumers.”
Oye emphasized the need for a phased approach that supports local producers while ensuring a stable economic environment.
Similarly, Paul Alaje, Chief Economist of SPM Professionals, cautioned that while the lifting of the ban might increase supply, it could also harm local producers and lead to unemployment and pricing instability in the medium term.
He urged for a comprehensive plan to develop local production capabilities before opening up the market to imports.
Professor Akpan Ekpo of the University of Uyo echoed these sentiments, emphasizing the importance of encouraging local production rather than relying solely on imports, which could negatively impact domestic producers in the long run.
“The ban lift will affect domestic production of dairy products, so those who produce locally will no longer have the incentive to produce,” he noted.
“The best approach would have been to encourage local production rather than lifting the ban for imports to come in.”
Dr Ikenna Nwaosu, an economist at the Nigerian Economic Summit Group, emphasized the need for a holistic approach, suggesting that the government should engage with local manufacturers to assess their capacity to meet national demand before considering lifting import bans.
“The government should emulate the holistic approach taken in the construction industry by convening a meeting with investors in locally made production to ascertain their projected timelines for meeting national demands,” he said.
In addition, Johnson Chukwu, Managing Director of Cowry Asset Management Limited, viewed the removal of restrictions as a temporary measure to address food shortages in the country.
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