CBN approves six companies to import milk, dairy products
THE Central Bank of Nigeria (CBN) has given approval to six companies to embark on importation of milk and dairy products into the country.
The companies include Friesland Campina WAMCO Nigeria, Chi Limited, TG Arla Dairy Products Limited, Promasidor Nigeria Limited, Nestle Nigeria PLC (MSK only) and Integrated Dairies Limited.
According to the apex bank in a report on its official website on Tuesday, these six companies have keyed into the bank back backward integration program to enhance their capacity and improve local milk production.
Backward integration, according to Investopedia is a form of vertical integration in which a company expands its role to fulfill tasks formerly completed by businesses up the supply chain.
The CBN Director Trade and Exchange Department O.S Nnaji according to the publication said “For the avoidance of doubt, all established forms ‘M’ for the importation of milk and its derivatives for companies other than the above for which shipment has not taken place should be cancelled immediately.”
Recall that in August 27, 2019 the Central Bank told lenders to stop processing milk import products on a credit basis. In addition, the bank said in July 2019 it would ban access to foreign currency for the imports to encourage local production.
According to the CBN, Nigeria spends between $1.2 billion to $1.5 billion annually to import milk.
Nigeria has been trying to shore up dollar liquidity on its currency markets and grow the naira, which has weakened in recent weeks after a fall in oil prices.
A weak currency scares off foreign investors because its ends up in lower yields on local debt.