The central bank of Nigeria (CBN) has told lenders to stop processing milk imports on a credit basis, bankers said it would ban access to foreign currency for the imports to encourage local production.
Nigeria spends between $1.2 billion and $1.5 billion annually to import milk, according to the CBN, which said that it would add milk imports to its restricted list for dollar sales. The bank did not say when the ban comes into force.
The CBN said milk imports will no longer be eligible under payment terms known as “bills for collection” which allowed the importer to buy on credit. Importers would need to fund their naira accounts and open letters of credit, bankers said.
Bankers said the central bank wants to streamline payment modes for milk imports.
Industry groups had been lobbying the government against the bank’s planned dollar curb, arguing that domestic milk production was not enough to meet local demand.
Nigeria relies on imports for most of what its 180 million population consumes. In 2015, the central bank restricted access to forex for 41 items which it said can be produced in Nigeria.
BusinessDay, 28 August, 2019
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