Nigeria’s central bank has lifted restrictions on buying U.S. dollars to pay for milk imports for six firms after measures introduced last year to boost local dairy production and conserve foreign currency reserves riled businesses.
The central bank said in a circular to currency dealers, seen by Reuters on Thursday, that it had asked banks to open import documents for firms including Nestle Nigeria, Dutch-owned FrieslandCampina, the local unit of Coca Cola bottling company HBC Chi Limited, Promasidor Nigeria and Danish-based TG Arla Dairy Products Limited while cancelling all other letters of credits.
Following an outcry after last year’s curbs on access to foreign exchange, that bank said it would offer low-interest loans to milk producers to spur local production. It also told lenders to stop processing milk imports on a credit basis.
Nigeria, Africa’s largest economy, typically spends between $1.2 billion and $1.5 billion a year on foreign milk.
Industry groups have been lobbying the government, arguing that domestic milk production was not enough to meet local demand.
Nigeria mostly relies on imports to feed its 180 million population. In 2015, the central bank restricted access to foreign exchange for 41 items which it said can be produced locally.
The central bank has said milk was added to the list after the success of the currency restriction policy and because of the large amount spent on imports.
On Thursday, the central bank introduced longer-term contracts on the naira to attract more foreign inflows, shore up its dwindling dollar reserves and try and stave off currency devaluation. Reuters
Pix: CBN Governor, Godwin Emefiele